Prime Village Portfolio Off The Market
Unitholders may be interested to read the attached article from The Australian Financial Review dated 20 September 2012.
The article reports that, in respect of the seven retirement villages that had been placed on the market earlier this year, the bids received were not sufficiently attractive and the properties have therefore been withdrawn from sale.
The article also suggests that the Receivers may now investigate the circumstances in which the village management rights came to be sold by the Trust. We have always maintained that there are major irregularities in the way that the management rights, a Trust asset, came to be acquired for no consideration by interests associated with Mr Lewski and then on-sold by Mr Lewski to Babcock & Brown Communities (now Lend Lease Primelife) in a transaction that earned Mr Lewski's Retirement Guide Pty Ltd the sum of $60 million. We have always believed that Retirement Guide did not have proper title to the management rights and that this deficiency in title extends to Lend Lease Primelife.
We find it extraordinary that Madgwicks acted for APCH in transferring, for no consideration, the village management rights from the Trust to Retirement Guide, and then acted for Retirement Guide when that company sold the management rights to Babcock & Brown Communities for $60m. In facilitating the transfer of the management rights from the Trust to Retirement Guide, Ms Gelbert, a Madgwicks' Partner, provided sworn testimony that she accepted instructions from Mr Lewski (who was of course, on the one hand, the Managing Director of APCH but also, and very importantly, the party who also stood to benefit from the transaction through the transfer of the management rights to his private company). We have always maintained that, as legal advisers to Prime Trust, Madgwicks had certain fiduciary responsibilities and obligations towards unitholders. We find it extraordinary that Ms Gelbert provided testimony that she did not consider unitholders when facilitating the transfer of the management rights to interests associated with Mr Lewski. These transactions not only led to Mr Lewski's Retirement Guide receiving $60m and the unitholders receiving nothing, but also precipitated a large writedown in the value of the retirement villages.