Creditors are battling to secure proceeds from the sale of an eight-bedroom “extravagant hideaway” on Melbourne’s Mornington Peninsula in the latest attempt to salvage funds from the wreckage of developer Steller’s collapse.
The large 22 hectare estate with a helipad and stand-alone three-bedroom “caretaker’s cottage” in Rosebud belonged to a company associated with Steller co-founder Nicholas Smedley.
The luxurious homestead was used as a weekender by the Smedleys.
The home at 310-330 Jetty Road described by estate agents as an “extravagant hideaway” was sold at a mortgagee auction in October for $4.65 million and was due to settle in December but two lenders made claims on the proceeds, Supreme Court documents show.
A five-minute drive from the beach in the popular bayside getaway suburb, it was mortgaged by Peter Bolitho’s Australian Securities which served a default notice on Mr Smedley’s company after it failed to pay interest on the loan.
Australian Securities then moved to sell the property and recoup its money.
It was blocked from settling the deal by a caveat slapped on the homestead by Guy Headley’s Atlas Advisors which is chasing up to $160 million it lent to Steller Group’s complex web of 100 or more companies.
Justice John Dixon approved the Supreme Court action on December 6 to remove Atlas’ caveat but documents lodged in court show the Sydney-based fund manager had lent $8 million against the same property.
After Australian Securities takes its cut of the proceeds “the indicative surplus from the sale of the property would be approximately $2,210,000,” the documents state.
“Australian Securities intends to pay the net proceeds of the land into court if there is no agreement between the caveators regarding their respective entitlement,” it said.
Australian Securities held first mortgages over at least four other Steller controlled properties, which it has since moved to sell.
A vacant development block at 259-263 Neerim Road Carnegie is believed to have fetched around $7 million. A Steller-owned shop at 25 Station Road in Cheltenham went for $1.05 million and another at 112 Fordham Avenue in Camberwell got $1.15 million at auction.
Two shops, 427A and 427B Hampton Street in Hampton, failed to sell at auction last year and are still looking for buyers.
Separate documents lodged with the Australian Securities and Investment Commission by administrators appointed to two Steller entities show Asia-based fund manager OCP is owed $93 million and Atlas Advisors substantially more.
“We understand that Atlas Funding are owed circa $160 million across the entire Steller Group,” SV Partners administrators Timothy Brace, Peter Gountzos and Michael Carrafa said in minutes lodged following a creditors’ meeting in October last year.
But Mr Headley said the sum owed was a lot less as Atlas had secured and liquidated at least 10 large mortgage assets and had control of further assets. “It’s substantially less than when we started,” he said.
In notes from the October creditors’ meeting for Otway Funds, Mr Brace said Mr Smedley and Steller’s co-founder Simon Pitard were divided into two camps.
“We understand that there are various joint interests that Nick and Simon have which are being fought for control over,” the minutes, filed with ASIC in accordance with Insolvency Practice Rules, said.
The creditors’ meeting was also told of sensational claims that forensic accountants were investigating the “misappropriation” of $15 million from a pool of $40 million in funds raised from Steller’s investors.
SV Partners has since been replaced as administrators of the two Steller companies, Otway Funds and Steller Investment Notes, by Andrew Yeo and Gess Rambaldi from Pitcher Partners.
Simon Johanson – business journalist at The Age and The Sydney Morning Herald.