by Paul McBeth
Waltus investors railing against the company's merger plans have failed to stay proceedings until their Court of Appeal hearing December 4.
The group of 57 dissenting investors has been fighting a court battle against Waltus' proposal to merge a bunch of property syndicates into one $227 million company and was back in the High Court yesterday (Wednesday). However, Master Thomson declined to order a stay of the merger, saying it was too late given the steps already taken and given that the group only represented three per cent of investors.
Waltus actually considers that the merger took effect from November 6, the original date of Master Thomson's judgement, and says that shares and mandatory convertible notes in the new company will shortly be on their way to investors.
However, the group has been granted an urgent hearing at the Court of Appeal in ten days' time and could still be successful in achieving their objective of a buyout.
They will also be arguing that the Master failed to decide on whether the ten-year exit right had been removed by the Companies Act 1993. That right existed in the original property syndicates and allowed any one investor to require the property's sale and a return of capital after ten years.
If it's still in place, the group say that this right would be lost through the merger and would make it a fundamentally different investment to the one they entered into.
Brian Moyle, a Whangarei chartered accountant and one of those leading the dissenting group, said yesterday that he'd like to think that the Court of Appeal would consider the merits of their request for a buyout.
"I still maintain that investors have been misled in the information that they have been given, and if they had had the full story - both the pros and cons - there wouldn't have been anything like the level of support that they (Waltus) received."
Moyle has recently sent a letter to some of the investors in Waltus syndicates other than those covered by the merger seeking their financial support for the appeal. He believes that it's in the interest of those investors to do so, as they're likely to face a similar situation in the future.
While he's had a handful of replies to say no, Moyle said he'd also had some positive feedback "and a reasonably good level of financial support".
He's pinpointed the Albany Power Centre syndicate, which he said has some 1080 investors, as the next merger candidate if the current Waltus proposal is successful.
Earlier story: Waltus merger not yet out of the woods