Property manager falls into receivership after collapse of Allco

The collapse of finance group Allco continues to send shockwaves through the finance and property sectors, with subsidiary Rubicon Holdings Australia the latest part of the empire to fall into receivership.

The collapse of finance group Allco continues to send shockwaves through the finance and property sectors, with subsidiary Rubicon Holdings Australia the latest part of the empire to fall into receivership.

National Australia Bank, which is owed $20 million by Rubicon Holdings, has appointed Deloitte as receivers and managers of the stricken property manager.

Allco purchased the 80% of Rubicon it did not already own in December 2007. It was one of Allco’s most controversial acquisitions. Not only was the price high – it paid $196.3 million in cash and stock – but the seller included Allco’s chief executive officer David Coe and then director Gordon Fell.

Fell, the founder of Rubicon, raised $870 million from investors in Rubicon, which was placed in three publically listed property trusts managed by Rubicon Holdings: Rubicon Japan Trust, Rubicon Europe Trust, and Rubicon America Trust.

These trusts have not been placed into receivership and “currently remain going concerns”. But trade in their shares has been halted and the combined value of the funds has dwindled from $870 million to $15.5 million.

The future of those trusts now appears uncertain.

Fell told The Australian this morning that investors chasing high returns and over-enthusiastic lenders were partly to blame for the collapse of Rubicon.

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