Court approves sale of Sheraton
Nick Nichols, business editor | March 2nd, 2010
ST George Bank has been given the all-clear to sell the Sheraton Mirage resort on the Gold Coast after a Supreme Court of Queensland decision handed down yesterday afternoon.
The decision is a big win for the property finance sector, but a major loss for investors in the Premium Income Fund (PIF).
The fund and Joe Ross's LJK Nominees -- second and third mortgagees to the Sheraton respectively -- will get nothing from the $62.5 million sale to Indian developer Pearl Australasia.
PIF, headed by Wellington Capital's Jenny Hutson, and LJK took St George to court in January arguing that, while St George as first mortgagee had a right to sell Sheraton land and building, it did not have the right to sell the hotel business.
Both argued the agreed sale price was well below the current market.
A 'disappointed' Ms Hutson last night said she would consider appealing the decision, although she conceded she must act quickly.
The sale was to have settled yesterday but that deadline has been extended.
Peter Kennedy, a partner with law firm McCullough Robertson which is acting for St George, yesterday welcomed the decision.
He said had the court ruled in favour of PIF, it would have 'sent shockwaves through the banking community'.
"(This ruling) confirms what we have always believed to be the case," he said.
But Ms Hutson said if yesterday's decision stood it had the capacity to alter lending involving multiple financiers.