So I haven’t done a Raine Square update in a while…and it still seems messy.
On February 1st, Luke Saraceni claimed he had independent legal advice that the receivers may have been invalidly appointed. Although the start of the article claims he is threatening court action, by the end of the article it seemed he wanted KordaMentha to take the appointment to court themselves first (though why would they, if they had already been appointed?)
Then on Feb 14th, KordaMentha were appointed as receivers for another of Saraceni’s projects, at 500 Hay St Subiaco (the Ace Cinema site). From what I can understand, 502 Hay St was sold last year, but the bank didn’t quite make all of their money back? This debt then fell on the 500 Hay St project. Both of these properties were held as guarantees against the Raine Square project. And so KordaMentha are going to have it up for sale in the next few months, which should pay off all the debts. Although Luke Saraceni is pretty biting in his assessment of the banks and whether they will actually pay off the amount they should. The article also reveals three of Luke’s other properties, which were also used as security against Raine Square, have also been put into receivership – a Victorian shopping centre, a block of flats in Spearwood and the block of land on which the Saracen Winery is located down south.
The next day, it was reported that Luke Saraceni filed a writ in the Supreme Court to have the administrators removed, as he believes there was no security listed for the Raine Square development with the bank, and therefore they have no right to take anything as security over the project.
On the 17th Feb, Saraceni was ordered to pay back the $1.33 million transferred the day before the receivers were appointed to Raine Square. This money will be held in a trust account until everything else gets sorted out.
The next day, Saraceni claimed he was back on top and would fight the receivers all the way.
Then in another blow, on the 7th March, another Saraceni property was seized, 18 The Esplanade, plus an office tower at 251 St Georges Terrace which is the property of Westgem’s (the development company of the Raine Square Tower) other partner Houssean Pourzand.
So that’s about where we’re up to for the moment … who’d want to be a developer??!!