Distressed Asset Realisation: De-risking a 38-Unit Residential Portfolio Under Liquidation

The Challenge: A company placed into liquidation due to shareholder disputes held a portfolio of 38 residential apartments. The challenge was to realise maximum value and provide a fair shareholder allocation. The portfolio faced significant constraints, including sub-optimal sizing and financing difficulties. Furthermore, disposing of all units simultaneously risked a 25% market discount due to oversupply.

Our Intervention: The Liquidator appointed us to develop a fiduciary de-risking and custom realisation strategy. We developed and managed a robust, multi-option strategy that provided an auditable justification for asset disposal. We converted the complex asset realisation into a predictable, financially modelled process.

Our impact:

• Financial Strategy: We developed a comprehensive financial comparison detailing estimated returns, costs, and timing for phased Individual Sales versus a Group Sale.

• Optimal Sale Mechanism: We recommended a two-pronged hybrid sale approach. This tested the market discount and hedged against the risk of oversupply.

• Governance & Dispute Mitigation: We provided the framework for a non-cash allocation. This resolved major shareholder disputes and avoided market oversupply risk.

• Asset Management Consolidation: We oversaw the management of multiple operational liabilities, including five managing agents, maintenance defects, and Owners Corporation disputes. We also prepared asset allocations for car parks and storage to stabilise the portfolio prior to realisation.