Investors in busted Letten scheme might see first payments after three years: KPMG receivers

Investors who placed funds in investment property schemes associated with former South Yarra property developer Mark Ronald Letten may soon receive their first payments since the appointment of receivers more than three years ago.

KPMG joint receivers and managers Damian Templeton and Philip Hennessy, appointed by a Federal Court to properties associated with Letten schemes in February 2010, have notified investors and other claimants that they intend to declare an interim distribution.

“It is not yet clear what amount, if any will be available for distribution,” said Templeton in a notice placed in today’s The Age and Herald Sun.

ASIC believes that more than 1,000 investors placed more than $100 million in the projects managed by Letten and promoted through a number of companies associated with Letten, particurlarly LGH Administration Pty Ltd and LGH Holdings Pty Ltd.

The investments were made between 1998 and 2010.

Schemes managed by Letten include the Healesville Walk Shopping Centre Joint Venture in Victoria, Reef House Resort in Palm Cove, Queensland and the Yarra Valley Golf Joint Venture in Chirnside Park.

The possibility of investors receiving a payment follows the receivers selling a number of properties in joint venture schemes operated by Letten.

Properties sold by administrators include 167-173 Flinders Lane, a five level office and retail building on the corner of Hosier Lane, which sold for $13.31 million in July 2010, the Glen Centre, retail and offices on Glenferrie Road in Hawthorn, which sold in August 2010.

Investors and claimants must submit a formal proof of claim or investment confirmation form to the receivers by March 25 (or have done so in the past) to participate in the possible interim distribution.

Letten, an accountant and director of LGH Holdings Ltd, is alleged to have promoted and sold investments in commercial property joint venture projects that were required to be registered as managed investment schemes under the Corporations Act.

He is facing 21 counts of operating unregistered managed investment schemes, one count of carrying on a financial services business without an Australian Financial Services (AFS) licence, and 15 counts of obtaining financial advantage by deception involving approximately $1.4 million.

He has been granted conditional bail to appear at the Victoria Country Court on March 20, 2013 for a directions hearing.

Action against Letten dates back to February 2010, when the Federal Court appointed Damian Templeton and Phillip Hennessy of KPMG as receivers and managers to the property of the 18 unregistered managed investment schemes and their related companies and ordered that the schemes be wound up.

The court orders follow an application made by ASIC to the Federal Court on February 2010 for the schemes to be declared unregistered and for receivers to be appointed to the properties in the schemes.

Detailed information for investors can be found on a dedicated KPMG – Letten website.

This article first appeared on Property Observer.

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