BrisCon loses court battle with Bolton

Justice Ross Robson, in the Supreme Court of Victoria, yesterday ruled in favour of Mr Bolton's Australian Style Investments and ordered BrisConnections to pay all costs of the 11-day trial.

BrisConnections tried to have Mr Bolton's company wound up after it amassed a $77 million liability from buying the company's listed units. It failed, and now faces a seven-figure bill.

"We achieved the outcome we were seeking," Mr Bolton said. "It's good news."

In handing down his rulingon costs, Justice Robson highlighted in his ruling that a put option deal struck betweenMr Bolton and a family friend, John Howard Williams  which allowed Mr Bolton to offloadmost of his 77 million units in BrisConnections and avoid a $77 million instalment liability  was a sham.

"I found that the put option was a sham. In particular, I found that neither party intended it to be legally binding. Nevertheless, I found that entering into the option agreement did not by itself, or in combination with the other matters relied on by ASI to establish the lack of propriety in the management of ASI, constitute sufficient grounds for a winding-up of Australian Style."

The company secretary of BrisConnections, Tamira Herbst, said: "We believed the legal action had merit, but unfortunately the court didn't rule in our favour."

While Justice Robson was reading his ruling, Mr Bolton's latest investment target, the embattled Multiplex Prime Property Fund, told the Australian Securities Exchange that it was in breach of its banking covenants, after the value of its commercial property investments fell $47.7 million since the end of last year.

As with BrisConnections, Multiplex Prime is a part-paid unit, with a further 40c per unit due in June 2011. Australian Style has amassed 12.56 per cent of the company, and owes about $14 million in future instalments on those units.

Multiplex Prime's property portfolio, worth $640 million this time last year, has now been independently valued at just $567 million, well below the loan-to-value ratio agreed with its financiers, National Australia Bank, ING and ANZ Bank.

The banks are owed in excess of $520 million and can now legally make a call for the 40c per unit at any time. They have agreed to give the company a stay of execution until August 31 to get its affairs in order.

The value of the property trust's assets  the Defence Plaza and 25 per cent of Southern Cross Tower in Melbourne, the American Express Building and a half-share of the Ernst & Young Centre in Sydney  have fallen 7.8 per cent in the past six months.

Multiplex Prime is ruling out asset sales as the property market is expected to get worse, which means it must somehow raise capital, or renegotiate its banking covenants, in the next month.