Blue Chip victims gagged on loans

Mark Bryers is understood to be conducting property transactions in Australia. Photo / Jason Dorday

Blue Chip victims settling their outstanding loans with finance company GE Money are being forced to say nothing "adverse" about the lender.

The gagging order, contained in "lifetime tenancy" agreements some of the elderly investors have little choice but to sign, prohibits them from airing their views on the internet.

"The borrowers agree not to comment adversely about the mortgagee or any member of the General Electric group of companies whether in New Zealand or elsewhere, to include any social media, websites or blogs," the clause says.

A spokesman for GE - which is owned by the American General Electric corporation - said the agreement was standard.

"GE Money can confirm that each agreement contains a confidentiality clause obliging all parties to the agreement to keep the contents of the agreement strictly confidential. This is not an unusual clause to see in an agreement of this nature."

As a result of the Blue Chip property scheme collapse three years ago, hundreds of investors were left with loans over their homes to financiers such as GE.

In a test case, Whangarei pensioners Bruce and Judy Bartle went to the Supreme Court arguing the loans were oppressive and documentation had been fraudulently altered to describe them as "self employed" so they would qualify.

But the court ruled in December that GE could not be held responsible for Blue Chip's actions.

The decision cleared the way for it and other lenders to enforce their rights. In at least one case, Westpac has sold a Blue Chip couple's West Auckland property in a mortgagee auction.

GE has about 100 Blue Chip-affected customers and has said that it will not put any of them out on the street.

It has been trying to reach agreements with those who qualify for its hardship provisions.

Many of the over-65 investors are understood to be close to signing "lifetime tenancies" allowing them to remain in their homes until they die, at which time the lender will take the property.

Others have been offered discounts on the total owed if they clear the debt.

The moves come as a former Blue Chip parent company is finally liquidated.

After a lengthy battle, Kiwi expatriate businessman Ross Haywood succeeded in the High Court in Auckland on Thursday in having Northern Crest Investments placed in liquidation over a A$142,000 debt ($185,000).

Northern Crest was once called Blue Chip New Zealand. It is listed on the Australian stock exchange but its shares have been suspended since the collapse of the Blue Chip scheme.

It has said it wants to move to the Australian Register of Companies, a move that would help it escape the New Zealand system.

Bankrupt Blue Chip founder Mark Bryers, who was sentenced to community service and fined on a raft of bookkeeping and record-keeping charges, was a director from 2007 to 2009.

Bryers is understood to be conducting property transactions similar to Blue Chip in Australia.

In its 2010 annual financial report, Northern Crest says its activities include "sourcing appropriate property for distribution by independent third parties who specialise in structuring investments in residential property for individual clients".

Two years ago the New Zealand Registrar of Companies failed in its own application to liquidate Northern Crest, made on the grounds the company was insolvent and had breached reporting requirements.

The company made a net profit of $3.7 million in the 2010 financial year.