Allied Farmers wins $6m in LA property litigation

Allied Farmers managing director Rob Alloway. Photo / Dean Purcell

Allied Farmers has announced a second positive development in the portfolio it purchased from Hanover Finance, though it continues to signal a further decline in the carrying value of the assets.

Last week the company said it had agreed to sell the second stage of the Five Mile Development near Queenstown. Today it said a legal dispute relating to a luxury development in Beverley Hills, California has gone its way.

Allied Farmers said it had received confirmation that it has been awarded more than $6 million after a long running legal dispute with Pacific Northstar Property Group.

The award relates to a luxury development in Beverley Hills, California, known as the Reeves Maison Condominiums, which were financed in part by Hanover.

The judgment, entered by a California court, granted the receiver permission to make an interim distribution of more than $6m plus interest, currently held in trust. In addition, the receiver also holds other funds of $3.5m in trust, which is forecast to increase to between $11.5m and $13.5m as the remaining condominiums are sold.

"Whilst there remain objectors to the distribution of the remaining funds, given the success in this judgment and the difficult position it creates for these objectors, the company is confident of further distributions in due course," managing director Rob Alloway said.

"This is a pleasing outcome for which we have been waiting some considerable time."

The company has previously said it was performing an annual review of the carrying value of its investment in its finance subsidiary, Allied Nationwide Finance.

"Given the recent asset impairments, followed by a credit rating downgrade, and issues surrounding the finance sector in general, we envisage a further write down will be necessary against the carrying value of Allied Nationwide in our full year accounts," said Alloway.

Allied Farmers purchased $396.2m of Hanover Finance and United Finance assets last year and has so far written them down to $124m.

- NZPA