Mortgage scheme liquidated in Apple Isle

A Tasmanian solicitors’ mortgage scheme has been pulled up by theAustralian Securities and Investments Commission(ASIC) which has appointed a liquidator to oversee the return of $12 million invested in it by more than 400 investors.

Liquidators John Woods and Barry Hamilton have been given the task by the Federal Court of Australia to wind up the mortgage scheme run by solicitors’ firm Piggott Wood and Baker.

This follows on from ASIC's announcement in February of an investigation into solicitors mortgage schemes, some of which had made spectacular losses in Western Australia and Tasmania.

Since the announcement, the watchdog began court action in March against one scheme, placed interim stop orders on the prospectuses of three other schemes and appointed a responsible entity for a further scheme.

In the latest incident, ASIC Tasmanian regional commissioner Simon Dwyer says liquidators were appointed to the Piggot Wood and Baker scheme because it was looking unlikely to wind up before the deadline which had been set for existing solicitors’ mortgage schemes to avoid breaching the Managed Investments Act legislation

Since the introduction of the Managed Investment Act in late 1999, solicitors mortgage schemes have been required to either abide by a series of new requirements or make a commitment to wind up.

Dwyer says there are currently about three or four mortgage schemes still active which have until next year to shut down in order to save them from breaching the Managed Investments Act. He says ASIC was particularly concerned about the Piggot Wood and Baker scheme because of its large size.

“The appointment of liquidators will continue to ensure that the remaining loans are realised [in] a timely manner. ASIC has taken this action to maximise returns to investors,” ASIC Tasmanian regional commissioner Simon Dwyer says.

Dwyer says the liquidators will consult with investors in their administration of the loans, while also providing regular reports to ASIC to ensure the best outcome for investors. The liquidators will report to investors every two months on the status of their investment accounts in the scheme.

The orders to appoint liquidators were obtained with the consent of Piggott Wood and Baker.