South Pacific

[TomW]

Does anybody know if the above firm of Sydney, Melboure and Adelaide developments has now gone under? I had the following sent to me

South Pacific joins string of insolvencies
marţi, 23:57 Autor: Cristi Moga

Australian real estate developer South Pacific has filed for insolvency in view of reorganising subsidiary South Pacific Group Melbourne Residence, which is developing a 71-villa project in the Tunari commune area, near Bucharest, with less than half the villas sold so far.
The Australians, which have developed another 100 villas in northern Bucharest as part of Sydney complex, are putting the decision to file for insolvency down to disagreements with representatives of Hardwick Holdings, the company's partner in the project.

"Works on the project have been 98% finalised, but we need money for the finishing touches, with works likely to take around ten weeks. We have the approval for the money from the bank, but our partners declined to sign the financing contract, so we decided to start the insolvency proceedings in view of reorganising, and let the court of law decide how the project is completed," Andrew Prelea, CEO and shareholder of South Pacific, told ZF.
Investment in the project amounted to around 9 million euros, with more than 5 million euros being sourced from a loan from the Banca Comercială Română (Romanian Commercial Bank - BCR).

 

[thebutlins]

Tom,

We bought in Sydney (due for completion June 2008). Wasn't completed so took S.P. to court Jan 2009. Had 6 court appearances and making very very slow progress. As far as I know. S.P. Melbourne has filed for insolvency, the rest of S.P. is still afloat but are being taken to court by unpaid workers on Nov 19th 2010, after that point we will know whether S.P. has staved off insolvency or not. Hope that helps. Contact me on 0 1 2 0 2 4 6 6 4 7 8 to chat further if you like.

Thanks,

John

 

[woodcliff]

We were notified by LI , MRIs legal side kicks, that SPG were gone under and that last chance to be registered as creditor coming up next Friday 29/10/10. Send them a load of money to represent us but they cannot guarantee anything.......no thanks.....good after bad.
What happened to 9,000 sent them already to take SPG to court because Melbourne development not completed?? Total loss I fear, deposit gone and a furniture package to go with it....what a load of gangsters !!!!!!

 

[tmn64]

hi does anyone have any information on what has happened with south pacific development have they gone into insolvency. i have been trying to speak with them regarding our property in the sydney de velopment but cannot contact them., can anyone help.

thanks

thelma

 

[neill d]

hi does anyone have any information on what has happened with south pacific development have they gone into insolvency. i have been trying to speak with them regarding our property in the sydney de velopment but cannot contact them., can anyone help.

thanks

thelma

I met Andrew Prelea CEO of South Pacific in mid November and he said that the bank wanted to lend for the Adelaide development on terms which were prohibitive.

On the other hand the terms from a bank were acceptable for the Melbourne development but this can't proceed either as he has put the South Pacific Melbourne company into insolvency in order to get rid of a joint venture partner who won't agree to proceed even with bank finance.

Andrew said that he had offered to relocate investors in the finished Sydney development.

From a conversation with a staff member today I get the impression that they are hoping to proceed with Melbourne next.

The worry is that with only Sydney and Brooklands to sell and rent out there will be insufficient cash flow for the business. They need to get something else moving. At least they had reduced their overheads by moving their offices into unsold properties.

My feeling is that money can easily be wasted trying to get money from a company which is struggling in the current Romanian economic climate. Hopefully the big cuts were done in 2010 and the Romanian economy can start to grow again, as is projected.

I am owed money for a late completion on my Sydney properties and a rental guarantee which was not honoured. I have one property still unlet. However I can tell that I am going to have to be patient for a while longer. I was told today that they were unable to start their quick build carbon neutal cheaper units development next to Sydney as they have been unable to generate sufficient demand from buyers. This would have been a way to trade themselves out of their difficulties.

 

[tmn64]

thank you for this up date. that is helpful. since puting up this post i have been able to make contact with them which was a relief.

i agree that there is little point in putting money into to try and get it back when they are struggling its a case of waiting and hoping that they will honour. the situation for me is that we were unable to get a mortgage for the property and the vat just made it not financially viable. we were meant to be in the sydney development.

it certianly has been a learning process. it is a case of staying in the Uk from now on and investing in property in an environemtn which i know nad understand better.

i wish you well with your venture.

cheers
thelma

 

[Nicola BSN]

I have had word from our lawyer that the deadline to be added to the First List of Creditors for South Pacific is 15th February 2011. Obviously they have tangible assets but after the bank and tax office have had their share it is going to be difficult, for anyone listing as a creditor after this deadline, to get any of their money back.

I would urge you to contact your lawyer to be added to the first list immediately.

If you are being told otherwise (by a lawyer with a conflict of interest, perhaps) go onto the British Consulate website and get another lawyer and make sure you have all your paperwork ready to send. I'll keep this forum on my desktop for a while in case anyone needs more info.

 

[woodcliff]

I was told by Geoff Spears not to go on list of creditors as they would finish Melbourne eventually, where we have €55k tied up in, and to be patient. He then offered us Adelaide development which he said was complete for a supposed discounted price. Now we can't contact anyone and don't know which way to turn. Does anyone know the current state of play with SP or their Melbourne development ??

 

[Nicola BSN]

Unfortunately, the deadline for the first list of creditors passed on February 15th. If you want to email us for more information admin will find out what happens now for people who have missed the deadline.

We did try and post the deadline on as many forums as we could find - but there aren't that many for Romania and ours is just starting - so not much traffic here yet.

Admin is: [email protected]

 

[neill d]

melbourne investors why don't you phone South Pacific and ask to speak to their legal department to see what they can propose for their investors now that they are putting the development into insolvency in order to get rid of the joint venture partner. I did this recently when I had a legal query. (Geoff Spears left the company last November for family reasons; Ana Danielescu appears to be the only Customers relations staff left and can also be used for queries)

Maybe you can transfer your investment into Sydney. This development is finished and does not require any funding. It is part of the holding company.

South Pacific is also trying to start a new development next to Sydney called Avalon, which is a carbon neutral prepack quick build development.

 

[neill d]

melbourne

I was told by Geoff Spears not to go on list of creditors as they would finish Melbourne eventually, where we have €55k tied up in, and to be patient. He then offered us Adelaide development which he said was complete for a supposed discounted price. Now we can't contact anyone and don't know which way to turn. Does anyone know the current state of play with SP or their Melbourne development ??

I was told by Ciprian, new head of South Pacific Sales, today that Melbourne is going to resume construction in a month or two. I don't know how true this is but perhaps they have sorted their joint venture troubles.

He also said they had sourced the funding to start Avalon.

He didn't want to comment on Adelaide.

 

[Nicola BSN]

Latest on the Melbourne insolvency is: there was a hearing on 15th February and that was the main deadline for creditors. There is another hearing in May. We have been told it may still be possible to add creditors but our lawyers are not making guarantees at this point.

I hope this is useful.

 

[David howe]

Cost of Proceedings

No lawyer is ever going to give you a guarantee, but what you need to be consious of is what they are charging for this service. It should not be North of 1000 Euros.

David Howe LLB. LLM

 

[David howe]

I was told by Geoff Spears not to go on list of creditors as they would finish Melbourne eventually, where we have €55k tied up in, and to be patient. He then offered us Adelaide development which he said was complete for a supposed discounted price. Now we can't contact anyone and don't know which way to turn. Does anyone know the current state of play with SP or their Melbourne development ??

Geoff, be wary of discounts and look at the market and not just purchase price same way as you would a 20% discount of 2008 prices in Ireland or the UK today.

People must learn to distinguish between discount and value.


David Howe LLB. LLM

 

[ROY CARTER]

I am interested in discusion with members who have investments in South Pacific Romania. I am invested in Sydney, but owed considerable sums in rental and penalties (for late delivery of the property). I am in contact with Andrew Prelea but not getting much sense. I am not persuing him in law yet. Any comparable experiences or advice?

 

[neill d]

I am owed for the same. I have concentrated on getting my Sydney properties let out and on collecting the rent, in collaboration with South Pacific who act as my agent without any agency charge, with claiming the debts put on hold as Andrew pleads poverty due to the current market. What is Andrew saying to you?

My lawyer has said that there is a 3 year time limit for making a claim, so I am beginning to discuss making a late delivery claim with her. My legal priority at the moment is dissolving my company, transferring properties to me and avoiding a VAT liability.

I would be interested in discussing this as well as claiming for late delivery and the rental guarantee.

 

[ROY CARTER]

Neill
Since handover of my property I have been putting in monthly invoices for penalty and rent. The arears of payment is some euros 20,000. I nag constantly and met Andrew last in March 2011. He complains that all income has to go to the bank until his euros 5 million debt to them is paid. This will be more than eliminated with the sale of all the Sydney properties (60% sold, he tells me at the moment). It is my view that he will pay up in due course. I am told it would take 2 years to get it to court and cost euros 2000. I am willing to be patient. I tend to think he is honest. I may be wrong. Keep in touch. I will keep you informed. My rental agreement with him expires March 31 2012 and I will need to setup for onward letting. I am interested in your VAT avoidance scheme but haven't worked it out for myself yet. I so far have avoided payment of VAT. You have several properties, I see.

 

[neill d]

Hi Roy

Thanks for the insight into SPC's finances.

I share your opinion of Andrew and I get an honest service from SPC but you do have to initiate things to get the good service.

It's interesting that you have been invoicing for the late delivery; I haven't been doing that. How have you calculated what is owed? Do you have an agreement with SPC?

My rental agreement with them also expires March 2012. They owe me the difference between what has been collected in actual rent and what they should have paid me. I think the original idea was that they would pay the rental guarantee out of the rent, when the market was completely different and the actual rent would have been greater than the guarantee.

I haven't paid any VAT yet but there is a potential liability if the properties are transferred to me from my company. I'll let you know if I get anywhere with the avoidance. Does your accountant have any ideas?

Incidentally, have you been paying your property tax? I built up quite a liability with the handover delay.

Best Neill

 

[ROY CARTER]

Neill

My Sale-Purchase and Construction Agreement has a 5% of the purchase price per annum for late delivery. Delivery was some 3 years late so I claimed 15%. By agreement this was to be paid monthly over the the two year rental ageement period.

There was an initial two payments then they had trouble with their sub-tenant who didn't pay the rent and they went to law.
Since then the place hasn't been let and no further payments have been made and the invoice amounts have accrued.

I paid property tax once but haven't had a claim since.

I am still trying to work out Vat liability but can't get a clear statement from my Romanian accountant Fin-Expert Consulting. There have been discussions about VAT added to rent in the future.

 

[ROY CARTER]

Neill

I was pleased to compare notes with you. We have common ground.

I will be visiting Romania in March 2012. At this time I will have wanted to have set up onward renting of my property.

You seem to have had some success with your lettings via SPC. I have not. My view is to get a letting agent other than SPC.

What do you think?

Roy