These buyers are now unsecured creditors of Ralan, which collapsed with a $277 million black hole in its trust accounts, and have little hope of getting any of their money back through the administration and receivership process.
Ralan’s lenders include Big Four bank Westpac (on its Arncliffe project in Sydney) and non-bank funders Wingate and Balmain.
Wingate and Balmain have appointed receivers over Ralan companies that hold the developers’ Gold Coast assets – its Ruby and Sapphire development sites and a hotel – which are expected to be sold over the coming months.
Mr Bransgrove said Wingate, which has been funding Ralan’s projects for many years, would have known if, as the administrator suggested, Ralan had never been profitable.
“If the losses could not be absorbed then Wingate, as mezzanine funder on these projects, would have suffered losses.
“If so, the question is ‘how did the parties deal with those losses?’
“Rather than Ralan going into liquidation … did they come to an agreement that Ralan would pay the shortfalls back at some future date?
“If so, how was Ralan to do that? Where would the lost capital come from?
“Given the enormous size of the Ralan Ponzi debt (by far exceeding the cash requirements for the Ruby and Arncliffe projects) one could reasonably conclude the money came from the investors in Ralan’s Ponzi scheme,” Mr Bransgrove said.