The directors of troubled Kingdom Developments are filing for bankruptcy, just six months after its Wollongong property was repossessed.
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As a result, investors will lose millions of dollars with no real likelihood of ever seeing their money again.
Back in December, the lender took control of a Gladstone Avenue site - where Kingdom was planning a nine-storey apartment - after the loan defaulted.
The lender put the property up for auction and once they and another mortgagee were paid out, there was not a cent left for investors.
Soon afterwards, other Kingdom developments started to topple, with projects ending up in the hands of receivers.
The company model saw investors buying shares in one of the more than 20 proposed developments, expecting to make money when the apartments started selling.
Investors put in thousands of dollars to buy shares, sometimes using their retirement net eggs.
While director Andrew Bodnar tapped into his dad's super to pay back some investors, that $100,000 was a drop in the bucket given the collective loses are likely to be well over $10 million.
In a Kingdom Developments letter from Mr Bodnar sent to an investor, it flags plans to file for bankruptcy once the final few projects are sold off.
The letter laid the blame for the bankruptcy with recent interest rate increases and low property valuations making it impossible to secure further funding.
"This [bankruptcy] will take place in the coming months ahead, once all remaining assets have been sold and once we work out what the total loss will be," Mr Bodnar's letter said.
"This decision has not been taken lightly, and we are acutely aware of the impact that it will have on our investors.
"We want to assure you that we are committed to repaying each and every investor from making a positive way forward even when there seems to be no way.
"We understand that you may feel frustrated and disappointed with this turn of events, and for that, we are truly sorry."
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Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
