9 Aug 2012

Supreme Court delivers win for Blue Chip investors

6:45 pm on 9 August 2012

Hundreds of Blue Chip investors have escaped the loss of their homes to cover the failed company's debts.

After the 2008 financial crisis caused the company to collapse owing $80 million, 3000 investors were left out of pocket. They had agreed to pay in advance for apartments some of which were never built.

But the Supreme Court on Thursday released a ruling letting 250 of the investors off still having to pay for them, saying the contracts fell short of meeting securities law.

That reverses previous High Court and Court of Appeal rulings.

Auckland investor Dave Lester had feared he would lose up to $600,000 and his home was on the line.

Mr Lester says he went into Blue Chip with a mortgage of $130,000 and he now has a mortgage of $300,000.

They had agreed to pay in advance for apartments that would be built and onsold at a profit.

A group of investors seeking to avoid meeting the original, four-year-old payments lost at the High Court and Court of Appeal.

But the Supreme Court has found the original contracts fell short of meeting securities legislation and can be voided.