Waltus merger not yet out of the woods

A group of dissenting shareholders hasn't given up hope of affecting the merger of several Waltus property syndicates into one company and is taking the matter to the Court of Appeal.

Thursday, November 16th 2000, 6:25PM

by Paul McBeth

A group of dissenting shareholders hasn't given up hope of affecting the merger of several Waltus property syndicates into one company, in spite of last week's High Court conditional approval of the proposal and Waltus' own view that the company already exists.

Co-counsel for the group, Hamish McIntosh of Russell McVeagh, said an appeal had now been filed and, after meeting with the Court of Appeal yesterday, a conditional date of December 4 had been set for the hearing.

The group has also applied to the High Court for a stay of the merger until their appeal is heard, as well as clarification of whether the merger could be considered effective given that a condition of that Court's approval has yet to be satisfied.

However, Waltus considers that the merger of the 27 syndicates into the new Waltus Property Investments has already taken effect from the date of the High Court judgement, last Monday November 6.

Waltus Director Shayne Hodge said yesterday that investors will receive new scrip early next week as well as a "wash-up" dividend and interest payment of money owed to them up to November 6, which would tidy up the transition from the separate syndicates to the new company.

Hodge said the independent board would have its first meeting today (Friday), appointing Bruce Bornholdt as chairman and John Whitehead as another board member.

Master Thomson at the High Court granted approval for the merger conditional on Waltus sorting out some $2.95 million in prepaid management fees, about which he said there had not been full disclosure. However, Hodge said the issue of the fees was something raised by the objectors at the 11th hour and Waltus hadn't necessarily put a lot into it, "but we'll deal with that".

Hodge also pointed out that the High Court judgement had said that inherent in the membership of any company was that members were bound by the decision of the majority. He said only about 50 people were objecting compared with some 8,000 in all the original syndicates.

"They were certainly within their rights to object, but (the objection) was clearly overturned by the High Court ruling."

Paul is a staff writer for Good Returns based in Wellington.

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