Finance company GE is likely to appeal a court decision that its loans to two retired Blue Chip investors are "oppressive".
Last week the Court of Appeal ruled in favour of Whangarei couple Bruce and Judy Bartle, who face losing their home after GE lent them more than it was worth to invest in Blue Chip.
The case has significant implications for over 200 other victims of the failed Blue Chip property investment scheme.
The Bartles' lawyer, Paul Dale, said he was expecting an appeal. GE would only say last week that it was "carefully considering the judgment".
The Bartles, on an income of $22,000 a year, ended up borrowing $630,000 against their $400,000 home and an Auckland investment unit that ultimately sold for just $250,000.
They had believed that apart from an initial loan of $137,000 Blue Chip would take care of any additional funding.
The Appeal Court said the pensioner couple were effectively borrowing to pay themselves a small income stream, and Blue Chip was "clipping the ticket at every point".
"This was such an utterly mad-headed - and oppressive - transaction that even Nelson with a telescope to his blind eye could have seen it as such."
GE argued it was the "innocent" lender because it had no association with Blue Chip and the loans were arranged through an intermediary company. But the court said a retired couple buying an investment apartment funded entirely by mortgages over their home and the apartment "should at least have put GE on inquiry".
An appeal of a second case brought by Dale on behalf of Blue Chip investors has yet to be heard.
Last year, the High Court ruled that a representative group of people who invested in three central Auckland developments through Blue Chip could not get out of their sale and purchase agreements on the apartments.
Through Blue Chip, the investors put down a deposit on the yet-to-be-built apartments and were paid for the use of their funds.
They were told that Blue Chip would purchase the apartments on completion and they would never have to own them.
But when Blue Chip collapsed in February 2008 the investors were left liable. The units have now been completed and the developers want to settle.
Meanwhile, Blue Chip victims are preparing to descend on the Auckland District Court next week, where the scheme's co-founder Mark Bryers will be sentenced on 31 charges brought by the Ministry of Economic Development. It is understood he may escape a prison term.
Carol Corner, 74, of Tauranga plans to attend court to "see him get his just deserts".
Expect GE to fight over Blue Chip loans
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