14 July 2014

Closing Oral Submissions

The closing oral submissions of the Trilogy Funds Management Limited as Responsible Entity for the Pacific First Mortgage Fund v Sullivan, Swan, Donaldson and McCormick trial will now commence in the Federal Court in Sydney on Wednesday, 16 July 2014 before Justice Wigney for an expected 3 days until Friday 18 July.

The hearing is open to the public and we encourage Unitholders to attend it; relevant details are as follows:

Wednesday 16 July 2014, Thursday 17 July 2014 and Friday 18 July 2014 at 10:15am

Court Room 18C

Federal Court of Australia
Law Courts Building
Queens Square
Sydney NSW 2000

We will provide specific details in relation to the court room and the time once they become available by way of a further update.

Should you have any enquiries please call Balmain Trilogy Investor relations on 1800 194 500 or email contact@balmaintrilogy.com.au

30 May 2014

Subsequent Hearing

The continuation of the Subsequent Hearing of the Trilogy Funds Management Limited as Responsible Entity for the Pacific First Mortgage Fund v Sullivan, Swan, Donaldson and McCormick trial will commence in the Federal Court in Sydney on Monday, 2 June 2014 at 10:15am and continue on Tuesday, 3 June 2014 at 10:15am before Justice Wigney.

The hearing is open to the public and we encourage Unitholders to attend it; relevant details are as follows:

Monday 2 June 2014 and Tuesday 3 June 2014 at 10:15am

Court Room 18C

Federal Court of Australia
Law Courts Building
Queens Square
Sydney NSW 2000

Justice Wigney has ordered that closing oral submissions be made over a three day period on 15-17 July 2014, following which a decision and reasons for judgment will be reserved.

Should you have any enquiries please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

7 May 2014

Pacific First Mortgage Fund claim against Minter Ellison Gold Coast

On 2 April 2014 Maurice Blackburn lodged a claim on behalf of Trilogy Funds Management Limited as responsible entity for the Pacific First Mortgage Fund (Trilogy and Fund, respectively) against law firm Minter Ellison Gold Coast (Minter Ellison). The claim was made in respect of losses sustained by the Fund following a co-lending transaction in favour of SP Marina Pty Ltd (In Liquidation) (SP Marina) in relation to the purchase of “Mariner’s Cove Marina” (Asset 32), located at 60-70 Seaworld Drive, Main Beach Queensland (Mariner’s Cove). The claim was commenced in the Federal Court of Australia and has been allocated to Justice Jacobson in Sydney.

Background

In April 2008 the Credit Committee of the Fund approved a total loan facility of $39.36m to SP Marina, with $11.76m to be advanced by the Fund and the remaining $27.6m to be advanced by City Pacific Limited (Receivers and Managers Appointed) (In Liquidation) (City Pacific) in its own right or as trustee. The loan approval was granted one month after the Board of City Pacific suspended unitholder redemptions. SP Marina was a related party to City Pacific. Another co-lender was also to provide additional loan funds to assist SP Marina to acquire Mariner’s Cove.

At the time of approving and advancing funds to SP Marina, City Pacific on behalf of the Fund engaged the services of Minter Ellison to assist with preparation of loan and mortgage documentation and associated materials. The final loan documentation and co-lending agreements effectively relegated the Fund to a subordinated ranking position behind the other co-lending party. This meant the Fund did not have a first-ranking security over Mariner’s Cove in respect of its advances to SP Marina and would rank second on any loan recoveries.

Claims

Trilogy’s claim alleges that, in entering into this co-lending arrangement, City Pacific failed to adhere to the Fund’s Constitution and Product Disclosure Statement, and was therefore in breach of the Corporations Act 2001 (Cth) (Corporations Act). Trilogy contends that by reason of Minter Ellison’s involvement in the alleged contravention of the Corporations Act it ought to compensate the Fund for losses suffered in connection with the SP Marina loan.

The SP Marina loan advances

Between 4 April 2008 and 4 April 2009 the Fund advanced amounts totalling $16,675,112.88 to SP Marina in relation to the purchase of Mariner’s Cove. The Fund suffered significant losses on the SP Marina loan. Trilogy claims that Minter Ellison should compensate the Fund for the full amount advanced to SP Marina less the amount received by the Fund from the sale of Mariner’s Cove following repayment of the full amount due to the co-lender. Trilogy on behalf of the Fund also claims interest on these losses from Minter Ellison.

Status of the claim

The claim was served on Minter Ellison on 3 April 2014. A first directions hearing is scheduled before Justice Jacobson in Sydney on Thursday, 8 May 2014.

We will keep Unitholders informed of any material developments in relation to this claim.

Should you have any enquiries please call Balmain Trilogy Investor Relations on 1800 194 500 or email contact@balmaintrilogy.com.au

30 April 2014

PFMF Regulatory Guide 45 - Disclosure under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in Regulatory Guide 45: Mortgage Schemes – Improving Disclosure for Retail Investors and outlines the extent to which Trilogy Funds Management Limited as Responsible Entity of the Pacific First Mortgage Fund and Balmain Trilogy Investment Management Pty Limited as Investment Manager satisfy them.

This disclosure is correct at 31 March 2014.

Please click on the below link to download a copy of the update.

11 April 2014

Subsequent Hearing

As previously advised, the subsequent stage of the Trilogy Funds Management Limited as Responsible Entity for the Pacific First Mortgage Fund v Sullivan, Swan, Donaldson and McCormick trial will commence in the Federal Court in Sydney on Tuesday, 15 April 2014 before Justice Wigney for an expected 3 days.

The hearing is open to the public and we encourage Unitholders to attend it; relevant details are as follows:

Federal Court of Australia
Law Courts Building
Queens Square
Sydney NSW 2000

We will provide specific details in relation to the court room and the time once they become available by way of a further update.

Should you have any enquiries please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

1 April 2014

Return of Capital

We are pleased to confirm that a return of capital payment totalling $4.395 million has been processed. All Unitholders on the register as at 28 February 2014 have now received a capital repayment of $0.005 (half a cent) per ordinary unit held.

Unitholders will either receive a cheque or have their nominated bank account credited, as per their current payment preference. Kindly be advised that cheques are being issued on 1 April 2014. Please note: If you have elected for your account to be direct credited, your capital payment will appear as ‘Distribution’ in the transaction description.

Should you have any enquiries please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

27 March 2014

Trilogy Funds Management Limited as Responsible Entity for the Pacific First Mortgage Fund v Sullivan, Swan, Donaldson and McCormick

Further to our update on 7 March 2014, the initial phase of the above-mentioned matter commenced on Monday, 10 March 2014 and was conducted over an 8-day period (Initial Hearing) before his Honour Justice Wigney in the Federal Court in Sydney.

The Initial Hearing dealt with matters relating to lending decisions made by Messrs Sullivan, Swan, Donaldson and McCormick, former directors and officers of City Pacific Ltd (Receivers and Managers Appointed) (In Liquidation) in regard to the Fund’s loan to Atkinson Gore Agricultural Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (AGA).

890 documents, comprising over 9300 pages, were tendered to the court in the Initial Hearing. The issues addressed in the Initial Hearing included the conduct of Mr Sullivan and the other directors at the time of approving increases in the AGA facility and the decision process undertaken by them.

Messrs Sullivan, Swan, Donaldson and McCormick were crossed-examined by Senior Counsel. Further evidence was provided by Trilogy Fund’s expert valuer, Mr James Eden of Herron Todd White, in relation the valuation of the underlying security property.

The subsequent stage of the trial will commence in the Federal Court in Sydney on Tuesday, 15 April 2014 at 10.15 am before Justice Wigney for an expected 3 days (Subsequent Hearing). A further update will be provided on the website at the conclusion of the Subsequent Hearing.

Closing oral submissions are scheduled to be heard by the Federal Court on 2 and 3 June 2014.

Should you have any enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

25 March 2014

2014 Half-Year Financial Report

Balmain Trilogy is pleased to present the Half-Year Financial Report (Accounts) for the 6 months ended 31 December 2013 for your investment in the Pacific First Mortgage Fund (Fund).

The Fund's auditors, BDO, have reviewed the Accounts and have verified that they have been prepared in accordance with applicable accounting standards and the Corporations Act 2001 (Cth). As required, the Accounts have been lodged with the Australian Securities and Investments Commission.

A copy of the Accounts will be emailed to Unitholders shortly.

Please click on the below link to download a copy of the Accounts. Should you have enquiries, please call Balmain Trilogy Client Services on Freecall 1800 194 500 or email contact@balmaintrilogy.com.au

21 March 2014

Return of Capital

As previously indicated, Balmain Trilogy is preparing to process a return of $0.005 per ordinary unit by 31 March 2014. We will provide Unitholders with confirmation once the repayment has been processed.

Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

7 March 2014

Federal Court proceedings against former CPL directors and officers

The full hearing of this matter will commence before his Honour Justice Wigney in the Federal Court of Australia in Sydney on Monday, 10 March 2014. It is expected to continue until 18 March 2014 and will be followed by a subsequent hearing from 15 to 17 April 2014, culminating with closing submissions on 2 and 3 June 2014.

Unitholders are welcome to attend the hearing, details of which are as follows:

Federal Court of Australia
Level 18, Law Courts Building
Queens Square
Sydney NSW 2000

Court Room 18D
Time: 10:00 AM

We will keep Unitholders informed in relation to any major developments in relation to this matter.

7 March 2014

Return of Capital

Balmain Trilogy is targeting a return of 0.5 cents per unit by 31 March 2014, subject to timely materialisation of our asset recovery projections.

This is a reduction from our initial forecast due to delays in the settlement of asset sales.

We will provide further information in relation to the forecasted payment in due course.

Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

23 December 2013

Return of Capital

We are pleased to advise that a return of capital payment totalling $4.395 million has been processed.

All PFMF Unitholders on the register as at 29 November 2013 have now received a capital repayment of $0.005 per ordinary unit held.

Unitholders will either receive a cheque or have their nominated bank account credited, as per their current payment preference. Please note that cheques will be issued on 23 December 2013.

Please note: If you have elected for your account to be direct credited, your capital payment will appear as ‘Distribution’ in the transaction description.

Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

16 December 2013

Acquisition of Commercial Precinct

Balmain Trilogy is pleased to announce that the acquisition of the ‘Commercial Precinct’ by an existing borrower of the Fund settled on 10 December 2013. As detailed in the June 2013 Fund Update, the Commercial Precinct is comprised of the following lots:

Lot Plan of Subdividion Area (SQM) Master Plan approval (Residential dwellings)
S22 435310J 2,802 34
S23 435310J 9,000  
S24 435310J 1,012 10
    12,814 44

The acquisition will unify the commercial core of the established Martha Cove portfolio which, in addition to the Commercial Precinct, consists of Precincts 3 and 4 (already under the control of the Fund).

The relative position of the relevant Precincts is shown below:

precinct map

The Commercial Precinct will be released to the market in due course as part of the Fund’s Precinct realisation program.

The Commercial Precinct has been designated as Asset 43.

6 December 2013

Fund Update

Balmain Trilogy is pleased to advise that a detailed Fund Update is now available and will be mailed or emailed to Unitholders shortly in accordance with their communication preferences. Included in the mail-out will be a letter from the PFMF Investor Committee and a copy of the Annual Financial Report (Accounts) for the year ended 30 June 2013.

Subject to timely materialisation of our asset recovery projections, we are targeting a return of 0.5 cents per unit prior to Christmas 2013 and an additional 1 cent per unit by 31 March 2014. A further update will be provided later in the month.

Please click on the below links to download a copy of Fund Update, PFMF Investor Committee letter and the Accounts.

Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

2 December 2013

PFMF Investor Committee

The 14th Meeting of the PFMF Investor Committee was held on 31 October 2013.

The minutes of the Meeting are now available on the website under the ‘Committee’ tab.

Please click on the below link to download a copy of the minutes. Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

1 November 2013

Asset 20 (Braeside, Victoria) – Sales and Marketing Update

As stipulated in our web update of 23 July 2013 (below), Asset 20 is a 29-hectare industrial estate situated in Braeside, Victoria, which consists of six lots averaging approximately 4.8 hectares. Lot U (approximately 5 hectares) was subdivided into 34 retail sub-lots in June 2012 and has been the subject of a comprehensive sales and marketing campaign.

All remaining lots comprising Lot U are subject to unconditional contracts of sale, as summarised below:

Lot No. Area (Sqm) Deposit Status Expected Settlement Date
13 1,279 10% Exchanged 27 January 2014
14 1,243 10% Exchanged 27 January 2014
15 1,184 10% Exchanged 27 January 2014
16 1,102 10% Exchanged 27 January 2014
17 1,051 10% Exchanged 27 January 2014
18 1,242 10% Exchanged 27 January 2014
19 2,808 10% Exchanged 15 November 2013
20 2,106 10% Exchanged 15 November 2013
21 1,686 10% Exchanged 15 November 2013
22 1,499 10% Exchanged 15 November 2013

The marketing of the estate is being undertaken by the receiver and manager appointed by the Fund in accordance their statutory obligations to ascertain and obtain market value. The prices achieved to date are in line with valuations obtained by the receiver and manager from time to time and reflect the fair market value of these lots.

A summary of the position in relation to Lot U is as follows:

Status No. Sale Price ($) Area (Sqm) Area (Ha)
Settled 24 8,334,528 34,835 3.48
Exchanged 10 2,987,820 15,200 1.52
Total 34 11,322,348 50,035 5.00

Marketing of the development super-lots (Q, W, X, Y and Z) will commence in early November through a public ‘Expressions of Interest’ campaign closing on 11 December 2013. The campaign will be led by Savills and will feature advertisements in leading print and internet media outlets, including The Age, Property Review Weekly and realcommercial.com.au.

A summary of super-lots Q, W, X, Y and Z is as follows:

Lot No. Area (Sqm) Area (Ha)
Q 24,010 2.40
W 41,680 4.17
X 69,650 6.97
Y 41,790 4.18
Z 55,720 5.57
Total 232,850 23.29

Examples of the marketing collateral to be published in the press and distributed via email and hardcopy brochures can be viewed by clicking on the links below.

Should you have any enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

 

31 October 2013

PFMF Regulatory Guide 45 - Disclosure under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in Regulatory Guide 45: Mortgage Schemes – Improving Disclosure for Retail Investors and outlines the extent to which Trilogy Funds Management Limited as Responsible Entity of the Pacific First Mortgage Fund and Balmain Trilogy Investment Management Pty Limited as Investment Manager satisfy them.

This disclosure is correct as at 30 September 2013.

Please click on the below link to download a copy of the update.

28 October 2013

2013 Full-Year Financial Report

Balmain Trilogy is pleased to present the Annual Financial Report (Accounts) for the year ended 30 June 2013 for your investment in the Pacific First Mortgage Fund (Fund).

The Fund's auditors, BDO, have reviewed the Accounts and have verified that they have been prepared in accordance with the applicable accounting standards and the Corporations Act 2001. As required, the Accounts have been lodged with the Australian Securities and Investments Commission. A further update will be posted on the website shortly.

Please click on the below link to download a copy of the Accounts. Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

9 October 2013

2013 Full-Year Financial Report

The Annual Financial Report of the Pacific First Mortgage Fund (Fund) for the year ended 30 June 2013 (Accounts) has been finalised and lodged with the Australian Securities and Investments Commission.

The net asset value per unit of the Fund as at 30 June 2013 was $0.11 ($0.13 as at 30 June 2012). The Accounts will be uploaded to the website shortly and subsequently mailed or emailed to Unitholders in accordance with their communication preferences.

27 September 2013

Kosho Litigation Finalised

In May 2010 proceedings were commenced in the Supreme Court of Queensland (Court) by Kosho Pty Ltd (Receiver and Manager Appointed) (Kosho), a borrower of the Fund, and City Co Pty Ltd (Receiver and Manager Appointed), a third party mortgagor of the Fund (collectively, the Kosho parties), against Trilogy Funds Management as Responsible Entity of the Fund (Trilogy).

The Kosho parties alleged that Trilogy, amongst other things, had breached the finance facility granted by the Fund to Kosho. All claims, except one resulting in Trilogy being ordered to pay nominal damages of $10, were dismissed by the Court. On 26 June 2013 the Court made orders to that effect and the Kosho parties were required to pay a proportion of Trilogy's legal costs.

On 26 June 2013 the Kosho parties appealed to the Queensland Court of Appeal and on 11 July 2013 Trilogy cross-appealed. Subsequently, on 16 July 2013 the Kosho parties notified the Court of Appeal that they wished to discontinue the appeal and agreed Trilogy’s costs of the appeal. On 13 September 2013 orders were made by the Court of Appeal formally dismissing the appeal and cross appeal with costs. The appeal proceedings are now finalised.

16 September 2013

Federal Court proceedings against former CPL directors and officers

A directions hearing was held before Justice Jacobson, the Convening Corporations Judge, on 5 September 2013.

The trial of this matter has been scheduled to commence before his Honour Justice Wigney in the Federal Court of Australia in Sydney on Monday, 10 March 2014 for an estimated period of two weeks.

We will keep Unitholders informed in relation to any major developments in relation to this matter in the lead up to trial.

16 September 2013

2013 Tax Statements

The June 2013 Tax Statements for the Pacific First Mortgage Fund (Fund) are now being finalised and will be mailed to Unitholders in the coming weeks.

In the interim, we can advise that the taxable income of the Fund for the financial year ended 30 June 2013 is zero.

If you have any questions or require any further information please contact the Balmain Trilogy Client Services team on 1800 194 500.

15 August 2013

Repayment of the CBA finance facility

Balmain Trilogy is pleased to advise that the CBA facility has now been fully repaid.

The final payment was made on 25 July 2013, following the sale of Assets 1 (Carrara) and 34 (Nerang), which settled on 19 July 2013.

Since the appointment of Trilogy Funds Management Limited as Responsible Entity and Balmain Trilogy as Investment Manager, payments of more than $91 million have been made to gradually reduce the debt owing under the Facility.

The full repayment of the debt will allow the proceeds from future asset sales to be directed toward capital repayments, which are expected to recommence toward the end of this calendar year. This is, of course, subject to the timely materialisation of our asset sale projections. We will keep Unitholders informed as to the likely timing of the first repayment.

23 July 2013

Asset 20 – Sales and Marketing Update

Asset 20 is a 29-hectare industrial estate situated in Braeside, Victoria, comprising six large allotments with an average size of approximately 4.8 hectares. One of the lots, Lot U (approximately 5 hectares), has been subdivided into 34 retail sub-lots and been the subject of a structured sales and marketing campaign producing 11 pre-sales. The contracts settled shortly after the subdivision plan was registered in June 2012.

Four lots (5, 19, 30 and 31) forming part of Lot U were put up for auction on Wednesday, 22 May 2013, which resulted in seven unconditional contracts of sale. Details are as follows:

Lot No. Area (sqm) Deposit Status Expected Settlement Date
5 1,379 10% Exchanged 22-Jul-13
6 1,363 10% Exchanged 20-Aug-13
30 998 10% Exchanged 21-Aug-13
31 1,748 10% Exchanged 23-Jul-13
23 1,374 10% Exchanged 11-Sep-13
32 1,749 10% Exchanged 13-Aug-13
33 1,748 10% Exchanged 13-Aug-13

Lot 8 is under a prior unconditional contract of sale expected to settle on or about 9 August 2013.

The marketing of the estate is being undertaken by the receiver and manager appointed by the Fund in accordance their statutory obligations to ascertain and obtain market value. The auction followed a comprehensive marketing campaign managed by Savills and CBRE, which was implemented via internet, press advertising and onsite signage. The prices achieved to date are in line with the valuation obtained by the receiver and manager and reflect the fair market value of these allotments.

Upon settlement of the eight aforementioned lots, fourteen lots will remain in Lot U. These lots will be marketed for sale over the coming months through an extensive campaign which will include advertising in The Age, Mordialloc Chelsea Leader, Bayside Leader, realcommercial.com.au, as well as on-site. Marketing of the remaining development lots (Q, W, X, Y, and Z) will also commence in the coming months.

A summary of the overall position in relation to Lot U is as follows:

Lot U - Stock Schedule
Stock Summary Number Sale Price ($) Area (sqm) Area (Ha)
Settled 12 4,739,135 18,343 1.83
Exchanged 8 2,641,593 11,474 1.15
Under Offer
For Sale 14 20,220 2.02
Total 34 7,380,728 50,037 5.00

Examples of the marketing collateral published in the press and distributed via email and hardcopy pamphlets can be viewed by clicking on the links below.

Should you have any enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au

12 June 2013

Fund Update

Balmain Trilogy is pleased to advise that a detailed Fund Update containing an Asset Review and a litigation update is now available and will be mailed or emailed to Unitholders shortly in accordance with their communication preferences.

Please click on the below link to download a copy of the Fund Update. Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

29 May 2013

Federal Court proceedings against former CPL directors and officers

Trilogy has narrowed its current claim against the former directors and officers of City Pacific Limited (Receivers and Managers Appointed) (In Liquidation) to focus on the core claims arising from loan advances made to Atkinson Gore Agricultural Pty Ltd (Receiver and Manager Appointed) (In Liquidation) (AGA). By narrowing the focus of the claims, Trilogy considers that pre-trial applications made by the defendants will be minimised, the overall length and cost of the trial will be reduced and the chances of obtaining an early date for trial will be increased.

Defendants’ application to transfer proceeding

In February 2013, the defendants advised that they would apply for a transfer of this case to the Supreme Court of Queensland where a separate recovery action against guarantors, Messrs Hartnett and Perry, is being conducted arising out of loan advances to Bullish Bear Holdings Pty Ltd (Receiver & Manager Appointed) (Bullish Bear). The Court directed that any such application be lodged by 8 March 2013. On 6 March 2013 Trilogy’s solicitors sent a letter to the defendants’ solicitors detailing why such transfer application would fail. If the proceeding was transferred to the Supreme Court of Queensland this would likely have resulted in a significant delay in obtaining a trial date and substantial increase in costs. The defendants chose not to lodge their application by 8 March 2013. They subsequently delayed more than two months before ultimately lodging their application on 15 May 2013, a few days before the matter was listed for a pre-trial directions hearing at which Trilogy had indicated it would be seeking a trial date.

In narrowing the focus of Trilogy’s claim to the AGA advances, the defendants’ application to transfer the case to the Supreme Court of Queensland was made redundant. On 21 May 2013, during the pre-trial directions hearing, Justice Griffiths dismissed the transfer application. Trilogy has always maintained the transfer application would fail. However, the hearing of that application itself would have caused delay and additional costs. This has now been avoided. The recovery action against Messrs Hartnett and Perry in relation to the Bullish Bear loan facility separately continues in the Supreme Court of Queensland.

Article in the Gold Coast Bulletin

On 24 May 2013, an article was published in the Gold Coast Bulletin regarding some of the events referred to in this update. There were a number of inaccuracies reported in that article, as detailed below:

  1. The title of the article “City Pacific in King Tide win” is misleading. Trilogy’s claim in respect of advances made to Bullish Bear has been withdrawn so as to reduce the number of issues in dispute and focus on the claims against the defendants regarding loan advances made to AGA over lands known as “Saddleback” (in the Gold Coast hinterland). The court has not considered (let alone determined) the Bullish Bear claims. This is not a “win” for the defendants.
  2. The reference to the $25 million claim regarding Bullish Bear is inaccurate. The claim relating to Bullish Bear was for $16.9 million plus interest, as was set out in the claim.
  3. Similarly the reference to the $35 million claim still being pursued is inaccurate. The claim relating to the loan advances to AGA is for $37.2 million plus interest, as detailed in Further Amended Statement of Claim filed by Trilogy on 22 May 2013. It follows that the Bullish Bear claim did not constitute “half” of the current action.
  4. There is no “second case” regarding Bullish Bear brought against the defendants. The AGA and Bullish Bear claims formed part of a single action commenced by Trilogy in April 2012.
20 May 2013

PFMF Regulatory Guide 45 - Disclosure under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in Regulatory Guide 45: Mortgage Schemes – Improving Disclosure for Retail Investors, and sets out the extent to which Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund (Fund) and Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) as Investment Manager satisfy them.

This disclosure is correct at 31 March 2013.

Please click on the below link to download a copy of the update.

11 April 2013

2013 Half-Year Financial Report

Balmain Trilogy is pleased to present the Half-Year Financial Report (Accounts) for the 6 months ended 31 December 2012 for your investment in the Pacific First Mortgage Fund (Fund).

The Fund's auditors, BDO, have reviewed the Accounts and have verified that they have been prepared in accordance with applicable accounting standards and the Corporations Act 2001 (Cth). As required, the Accounts have been lodged with the Australian Securities and Investments Commission.

A copy of the Accounts will be emailed to Unitholders shortly, along with a Fund Update. In addition, a comprehensive Fund Update containing an Asset Review and litigation update will be uploaded to the website in April and mailed or emailed to Unitholders in accordance with their communication preferences.

Please click on the below link to download a copy of the Accounts and the Fund Update. Should you have enquiries, please call Balmain Trilogy Client Services on Freecall 1800 194 500 or email contact@balmaintrilogy.com.au

13 March 2013

Federal Court proceedings against former CPL directors and officers

Following the Federal Court’s dismissal (with costs) of Mr Stephen McCormick’s application (to have his cross claim determined in full prior and separately to the hearing of Trilogy’s claim) on 26 February 2013, a trial date may be allocated at this Thursday’s directions hearing, subject to:

  1. a further application which may be brought by the defendants to have the proceedings moved to the Supreme Court of Queensland (and heard together with another action); and
  2. the schedule and convenience of the Court, particularly given that a trial judge has not yet been appointed in Justice Emmett’s place following his appointment to the NSW Court of Appeal.

We will provide Unitholders with a further update following Thursday’s directions hearing.

6 March 2013

Unsolicited, Anonymous Misleading Letter to Unitholders

Some Unitholders may have received an unsolicited and unsigned letter in January 2013 (Anonymous Misleading Letter). The Anonymous Misleading Letter contains information likely to mislead and deceive Unitholders in respect of Balmain Trilogy’s management of the Pacific First Mortgage Fund (Fund).

For the sake of clarity please note that:

  • the unit price of the Fund as at 30 June 2009 was $0.48 per unit, not $0.63 per unit as indicated in the Anonymous Misleading Letter (see the audited Financial Accounts of the Fund for the financial year ending 30 June 2009, which can be viewed here);
  • to date, we have returned a total of $79.63 million in capital to Unitholders (including Hardship Redemptions), which equates to $0.091 per unit;
  • we have reduced the CBA debt facility (Facility) by over $81 million, which equates to approximately $0.092 per unit; and
  • Trilogy Funds Management (Trilogy), the Responsible Entity (RE) of the Fund, has waived over $880,000 in management fees in accordance with its pledge to return $0.04 per unit to Unitholders in April 2011 and a further $0.04 per unit in October 2011.

The Anonymous Misleading Letter claims that the repayment of the Fund’s Facility has been unreasonably or unnecessarily delayed. This claim is inaccurate and misleading. At all times we have acted in the best interests of Unitholders in directing available liquidity towards either the repayment of the Facility or making payments to Unitholders. We have not retained surplus cash at any stage. In reality, we have sought extensions of the Facility to enable accelerated repayments of capital to Unitholders.

The Anonymous Misleading Letter also claims that a number of the Fund’s major assets have been sold at fire sale prices. This claim is false. We reconfirm that no fire sales have taken place and that all assets have been placed on the open market, comprehensively advertised through well-funded marketing campaigns and sold at fair market values.

The Anonymous Misleading Letter states that a select group of members have secured the support of One Investment Group (OIG) to take over as RE of the Fund. Representatives from OIG and Balmain Trilogy have met to discuss the Anonymous Misleading Letter and OIG has unequivocally advised Balmain Trilogy as follows:

  • OIG has no interest in seeking the replacement of Trilogy as RE unless the replacement is supported by Trilogy;
  • OIG acknowledges that the costs of a hostile (that is, unsupported) replacement of the RE would be substantial and not in the best interests of Unitholders; and
  • OIG was not responsible for drafting the Anonymous Misleading Letter and was previously unaware of the numerous inaccuracies contained therein.

We remain committed to the responsible stewardship of the Fund and structured realisation of the remaining assets, while retaining sufficient liquidity and maintaining the financial viability of the Fund. Maximising the return of capital to Unitholders remains our foremost objective and we firmly believe we are best placed to achieve this.

6 March 2013

Federal Court proceedings against former CPL directors and officers

In September 2012 Messr Stephen McCormick (third respondent, first cross-claimant) lodged an application to have his cross claim determined in full prior and separately to the hearing of Trilogy’s claim. Mr McCormick’s motion, which Trilogy opposed, claimed that he ought to be indemnified by Trilogy (in its capacity as RE of the Fund) for legal costs he incurred in defending Trilogy’s claim against him, at least until Trilogy’s claim is determined.

At the 14 December 2012 directions hearing, Mr McCormick was granted a further extension of time until 31 January 2013 to tender evidence in support of his claim, which he failed to do, breaching court orders. He subsequently confirmed that no further evidence will be filed on his behalf in response to Trilogy’s claim. Separately, the other defendants (Messrs Sullivan, Donaldson and Swan) were granted an extension until 31 January 2013 to furnish additional expert evidence, also failing to do so, in breach of court orders. In February 2013 they confirmed that no additional expert evidence will be filed.

On Tuesday, 26 February 2013, Mr McCormick’s application was dismissed by Justice Emmett, who ordered Mr McCormick to pay Trilogy’s legal costs pertaining to that application.

The next hearing is scheduled for 14 March 2013 to determine whether a trial date can be allocated. Justice Emmett, who has presided over the proceedings since their inception in April 2012, has been appointed to the NSW Court of Appeal effective 7 March 2013, and a new judge is expected to be appointed in his place in the coming weeks.

Should you have any queries, please contact Balmain Trilogy Client Services on Freecall 1800 194 500 or email contact@balmaintrilogy.com.au

15 November 2012

Fund Update

Balmain Trilogy is pleased to advise that a Fund Update and Asset Schedule are now available and will be dispatched to Unitholders in the coming fortnight. Included with the mail out will be a copy of the Annual Financial Report for the year ended 30 June 2012 and Unitholders’ individual periodic statements.

Please click on the below link to download a copy of the Fund Update and Asset Schedule. A link to the 2012 Annual Financial Report is included in the 12 October 2012 entry (below).

22 October 2012

PFMF Regulatory Guide 45 - Disclosure under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission (ASIC) in Regulatory Guide 45: Mortgage Schemes - improving disclosure for retail investors and explains to what extent Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund (the Fund) and Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) as Investment Manager satisfy them.

This disclosure is correct as at 30 September 2012

Please click on the below link to download a copy of the update.

12 October 2012

2012 Annual Financial Report

Balmain Trilogy is pleased to present the Annual Financial Report (Accounts) for the year ended 30 June 2012 for your investment in the Pacific First Mortgage Fund (Fund).

The Fund's auditors, BDO, have reviewed the Accounts and have verified that they have been prepared in accordance with applicable accounting standards and the Corporations Act 2001 (Cth). As required, the Accounts have been lodged with the Australian Securities and Investments Commission (ASIC).

A copy of the Accounts will be mailed or emailed to Unitholders shortly, along with your periodic statement and a Fund Update.

Please click on the below link to download a copy of the Accounts. Should you have enquiries, please call Balmain Trilogy Client Services on 1800 194 500 or email contact@balmaintrilogy.com.au.

9 October 2012

Defamation proceedings against Griffin

In 2011 Phillip Sullivan brought defamation proceedings against Andrew Griffin, joint Managing Director of Balmain Trilogy, for remarks he had made to investors of the City Pacific First Mortgage Fund in November 2010. Those proceedings have now settled and pursuant to the terms of the settlement neither party is permitted to disclose or discuss the terms of settlement.

Federal Court proceedings against former CPL directors and officers

Further to the web update on 24 August 2012, we wish to advise that a directions hearing was held on 27 September 2012. At the hearing a timetable was put in place for the further conduct of the litigation, including directions for the Responsible Entity and respondents to file and serve their evidence by 4 October and 2 November, respectively. The matter is listed for further directions on 9 November 2012, at which time a date for the trial may be allocated.

20 September 2012

Return of Capital

We are pleased to advise that a return of capital payment totalling $6.6 million has been processed.

All PFMF Unitholders on the register as at 3 September 2012 have now received a capital repayment of $0.0075 per ordinary unit held.

Unitholders will either receive a cheque or have their nominated bank account credited, as per their current payment preference. Please note that cheques will be issued on 21 September 2012.

Please note: If you have elected for your account to be direct credited, your capital payment will appear as ‘Distribution’ in the transaction description.

2012 Tax Statements

The June 2012 Tax Statements for the Pacific First Mortgage Fund (the Fund) are now being finalised and will be mailed to Unitholders in the coming weeks.

In the interim, we can advise that the taxable income of the Fund for the financial year ended 30 June 2012 is zero.

A Fund update will be despatched with the Annual Financial Report (Accounts) and the Periodic Statements for the year ended 30 June 2012.

If you have any questions or require any further information, please contact the Balmain Trilogy Client Services team on 1800 194 500.

06 September 2012

Return of Capital

Further to Balmain Trilogy’s recent discussions with the CBA, it is likely the Fund’s finance facility will be extended. Accordingly, this will allow for a capital repayment of $0.0075 per unit (3/4 of a cent) to be made to all Unitholders within the coming weeks. Confirmation of the actual payment date will be provided in due course.

24 August 2012

Federal Court proceedings against former CPL directors and officers

Trilogy Funds Management Limited as Responsible Entity of the Fund is pursuing a claim against Phil Sullivan, Stephen McCormick, Ian Donaldson and Thomas Swan, former credit committee members and directors of City Pacific Limited, the Fund’s previous Responsible Entity. Class action law firm Maurice Blackburn has been retained to act for Trilogy.

The $60 million claim was filed on 27 April 2012 in the Federal Court in Sydney. It alleges breaches by the former directors and officers of their statutory duties under the Corporations Act 2001. At the centre of the claim are loans provided by City Pacific to borrowing entities Bullish Bear Holdings Pty Ltd (Receiver & Manager Appointed) and Atkinson Gore Agricultural Pty Ltd (Receivers & Managers Appointed) (In Liquidation) between 2006 and 2009, which resulted in substantial losses to the Fund.

Supreme Court proceedings - examinations

The Fund’s investigation into the examinable affairs of City Pacific is progressing well. Phil Sullivan will be further examined in the Supreme Court of NSW (Equity Division) on 5-7 September 2012, together with other individuals (including former officers of City Pacific), in relation to their involvement in the “examinable affairs” of the Fund.

Finance facility and return of capital

We wish to advise that Balmain Trilogy has been in discussions with the Commonwealth Bank of Australia regarding an extension of the Fund’s finance facility, which matures on 31 August 2012.

As part of these discussions, Balmain Trilogy has requested that the facility covenants be extended to enable an immediate return of capital to Unitholders. Until an extension of the Fund’s facility is finalised, no capital payments can be made. We will advise Unitholders as soon as an agreement has been reached.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.

08 June 2012

Return of Capital

We are pleased to advise that a return of capital payment totalling $8.79 million has been processed. All PFMF Unitholders on the register as at 24 May 2012 have now received a capital repayment of $0.01 per ordinary unit held. Unitholders will either receive a cheque or have their nominated bank account credited, as per their current payment preference. Please note that cheques will be issued on 13 June 2012.

Given ongoing difficulty in selling the Fund’s underlying security assets in a market of declining values and limited purchaser interest, we are returning $0.01 per unit now and target to return a further $0.01 per unit by 30 June 2012. We emphasise that this is a target and is subject to anticipated security settlements and market conditions, which may delay payment by the targeted date. Be assured that we remain focussed on achieving this target.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.

Please note: If you have elected for your account to be direct credited, your capital payment will appear as “Dividend CFS” in the transaction description.

01 May 2012

PFMF Regulatory Guide 45
- Disclosure under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in the Regulatory Guide 45: Mortgage Schemes - improving disclosure for retail investors and explains to what extent Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund (the Fund) and Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) as Investment Manager satisfies them.

This disclosure is correct at 29 February 2012

Please click on the below link to download a copy of the update.

27 April 2012

Trilogy launches a $60m Federal Court action against various City Pacific Directors

Maurice Blackburn on behalf of Trilogy Funds Management Limited as responsible entity of the Pacific First Mortgage Fund, has today filed a claim against certain former directors and officers of City Pacific Limited in the Federal Court of Australia.

The claim seeks to recover damages of $60 million arising from losses on two loan transactions which were approved by the credit committee of City Pacific Limited.

Please click on the following link to view the Press Release.

We will keep you updated on this action as it progresses.

20 April 2012

Fund Update

Balmain Trilogy is pleased to advise that a Fund update is now available and will be dispatched to Unitholders in the coming week. Included with the mail out will be a letter from the PFMF Investor Committee and a copy of the Interim Financial Report for the six months ended 31 December 2011.

Please click on the below links to download a copy of Fund update, a letter from the PFMF Investor Committee and a copy of the Interim Financial Report for the six months ended 31 December 2011.

3 April 2012

Return of capital

Balmain Trilogy is pleased to advise that a return of capital payment totalling $8.79 million has been processed. All Unitholders on the register as at 26 March 2012 will receive a capital repayment of $0.01 per ordinary unit held. Unitholders will either receive a cheque or have their nominated bank account credited, as per their current payment preference.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.

9 February 2012

Examination of Phil Sullivan

As part of the Pacific First Mortgage Fund (the Fund) investigation into the examinable affairs of City Pacific Limited (receivers & managers appointed) (in liquidation), Mr Philip Sullivan appeared in the Supreme Court of NSW on 2 and 3 February 2012.

These examination hearings allowed Mr Tony Martin S.C., appearing on behalf of the Fund and instructed by Maurice Blackburn, to question Mr Sullivan in relation to City Pacific Limited and the City Pacific First Mortgage Fund. In particular answers were sought in respect of Mr Sullivan's knowledge of the Marina Cove, SP Marina and Blackbean transactions entered into during the period when City Pacific Limited was the responsible entity of the Fund. Mr Sullivan was also examined in relation to his personal financial position.

As at 2 February, Mr Sullivan had failed to fully comply with a production order served on 20 January 2012, first returnable on 30 January 2012, requiring production of documents to the Supreme Court of NSW relating to Mr Sullivan's financial position. Mr Sullivan has accepted the terms of the production order and produced some documents in answer to it but has not, as yet, complied with that order. As a result, the production order has been further adjourned to 24 February 2012. Additionally, on 3 February 2012 the Supreme Court of NSW ordered that any further extension of time that Mr Sullivan requests for compliance with the production order is to be supported by an affidavit to be served 7 days prior to 24 February 2012.

At the close of the hearing on 3 February 2012, the examination of Mr Sullivan was 'stood over' generally, allowing the Fund a period of six months in which it may elect to recall Mr Sullivan to attend Court to answer further questions under oath regarding the examinable affairs of City Pacific Limited, with 14 days' notice to Mr Sullivan.

Further information regarding these examinations will be made available to Unitholders in due course. The next Court allocated hearing dates for examination are 19-21 March 2012.

20 December 2011

Fund Update

Balmain Trilogy is pleased to advise that a Fund update is in the process of being printed and sent to all Unitholders in the Pacific First Mortgage Fund. The update includes information on the property market, the asset realisation program, litigation, hardship and the failed Bransgrove/Sullivan take over attempt.

Please click on the below link to download a copy of the Fund update.

06 December 2011

Unitholder Meeting CANCELLED by Bransgrove / Sullivan

Matthew Bransgrove, the convener of the meeting has now written to Balmain Trilogy advising the meeting of members scheduled for 9 December 2011, has been cancelled.

The cancellation of the meeting is welcomed by Balmain Trilogy and Unitholders, as the Bransgrove/Sullivan self-interest campaign has now drawn to a close.

Please do not hesitate to contact the Balmain Trilogy Client Services team on 1800 194 500 should you have any questions.

05 December 2011

Unitholder Meeting ABANDONED by Bransgrove / Sullivan / Stacks

Bransgrove / Sullivan / Stacks Fail to Advise Unitholders

Stacks have announced on their website that they have withdrawn from the Bransgrove/Sullivan proposal thus rendering the meeting of no effect. The announcement states that Stacks have:

" … withdrawn their consent to act as the Responsible Entity for the Pacific First Mortgage Fund as proposed in the Notice to Members dated 11 November 2011."

Typical of how Bransgrove/Sullivan have conducted this campaign they have failed to tell Unitholders that the meeting is no longer proceeding. Whilst Balmain Trilogy continues to seek formal advice from them, Unitholders should proceed on the basis that the meeting is not continuing and that their disgraceful and self-interested campaign is now at an end1.

It was clear that Unitholders saw through their charade and that their proposal was doomed to fail. Computershare have released the following voting status as at 4pm, Friday 2 December 2011.

RESOLUTION 1
& RESOLUTION 2
Units
Voted
% of Total Register % of Proxies Received
For 11 million 1% 3.5%
Against 300 million 34% 96.1%
Abstain 1 million 0% 0.5%
Total 312 million 35% 100.0%

With approximately 35% of the vote in, only 3.5% of the votes were in favour of the appointment of Stacks as responsible entity.

Voting in favour of Balmain Trilogy exceeded 96%.

We reiterate Unitholders should proceed on the basis the meeting has been cancelled.

Balmain Trilogy will shortly be providing Unitholders with a written Fund update advising them of:

  • Capital repayments;
  • Litigation;
  • Martha Cove;
  • Asset realisations.

Balmain Trilogy appreciates the overwhelming support it has received from Unitholders and assures Unitholders that it will continue to act in their best interests without fear or favour.

1. Balmain Trilogy has now booked the cancelled venue (Radisson Resort Hotel, Palm Meadows Drive Carrara Gold Coast) and will have staff present to advise any Unitholders that turn up that the meeting has been cancelled. Unfortunately, due to lack of information provided by Bransgrove / Sullivan, Balmain Trilogy does not have sufficient time to advise all Unitholders in writing.

30 November 2011

Sullivan Withdraws: Balmain Trilogy Urges Unit Holders to Continue To Lodge Proxy Votes

Balmain Trilogy today called on unitholders in Pacific First Mortgage Fund to continue to lodge proxies against the appointment of Stacks Managed Investments as the new manager of the Fund following Phil Sullivan’s withdrawal of support for a unit holder meeting scheduled for December 9.

Until such time as Matthew Bransgrove – Mr Sullivan’s lawyer and the convenor of the meeting - formally abandons the meeting, unit holders should assume it is proceeding.

Please click on the following link to download a copy of the Balmain Trilogy’s media release.

29 November 2011

Website Promoting Replacement Responsible Entity Shut Down; Balmain Trilogy Raises New Concerns about Stacks Independence

Balmain Trilogy has today raised new concerns about the December 9 Unitholder meeting to vote on the future management of the Pacific First Mortgage Fund (PFMF), after the proposed new manager's website was shut down.

Ray and Paul Stack are the directors of Stacks Finance, the proposed new responsible entity of PFMF and are also the directors of Pacific First Management Pty Limited, the proposed new manager of PFMF. Ray and Paul Stack closed the site after admitting that information contained on the website had not been authorised by them.

Please click on the following link to download a copy of the Balmain Trilogy’s media release.

28 November 2011

VOTE AGAINST THE BRANSGROVE / SULLIVAN PROPOSAL

Please click on the below link to download a copy of Balmain Trilogy’s letter to all Unitholders.

Please call the Balmain Trilogy Client services team on 1800 194 500 if you have any questions

Balmain Trilogy Letter to Unitholders

SMH Article

Please note: The YELLOW proxy form referred to in the letter has been mailed to Unitholders.

28 November 2011

Balmain Trilogy Warns that Claims Against Sullivan and Others May Be At Risk

Balmain Trilogy today warned that potential claims against Phil Sullivan and others could be halted if Matthew Bransgrove, his lawyer, was to succeed in his attempt to change the Responsible Entity of the Pacific First Mortgage Fund (PFMF).

Please click on the below link to download a copy of Balmain Trilogy's media release.

Please call the Balmain Trilogy Client services team on 1800 194 500 if you have any questions.

Balmain Trilogy's Media Release

28 November 2011

Philip Keith Sullivan v Australian Securities and Investments Commission (ASIC)

Balmain Trilogy provides the following update to all Unitholders.

In a directions hearing before Justice Jacobson in the Federal Court on 25 November 2011 in the matter of Philip Keith Sullivan v Australian Securities and Investments Commission (ASIC), it was apparent that Sullivan had discontinued his claim that ASIC’s intended examination of Sullivan pursuant to s.19 was an “abuse of process”.

Justice Jacobson set a hearing date of 11.00am on 12 December 2011 to consider whether Sullivan has sufficient time to prepare for the ASIC examination. Counsel appeared for Sullivan as instructed by Matthew Bransgrove (Mr Sullivan’s lawyer).

We also note that Matthew Bransgrove is the Convenor of the Unitholder Meeting called for 9 December 2011 seeking the removal of Balmain Trilogy.

ASIC Update

25 November 2011

INVESTOR COMMITTEE STATEMENT TO ALL UNITHOLDERS

Following a meeting of the Pacific First Mortgage (PFMF) Investor Committee (IC) that was held on 24 November 2011, it has been requested that the following statement be published on the Balmain Trilogy website. This letter will also be mailed to PFMF Unitholders.

Please click on the below link to download a copy of the IC’s statement to PFMF Unitholders.

Investor Committee Statement to Unitholders

24 November 2011

Investors lose, still no action

Source: Sydney Morning Herald

HE'S a Gold Coast entrepreneur. He was responsible for the destruction of more than half a billion dollars of investors' funds. Now he is promising to ride back in and save the day. Read more

24 November 2011

Balmain Trilogy Requests Link to Provide Proxies to Ensure Unitholder Votes Are Valid

Balmain Trilogy has requested Link Market Services to provide them with details of returned Proxy votes received ahead of the Pacific First Mortgage Fund (PFMF) Unitholder meeting so as to avoid votes being marked invalid.

Balmain Trilogy is committed to ensuring that all Unitholders are given an opportunity to vote at the meeting if they wish to and that order and integrity are maintained in the voting process.

Please click on the below link to download a copy of Balmain Trilogy's media release.

Balmain Trilogy's Media Release

23 November 2011

Balmain Trilogy Rebuts Bransgrove’s Misleading Fund Monies Assertions

Balmain Trilogy said today assertions made by Matthew Bransgrove regarding the application of monies received by Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund (the Fund) were inaccurate and misleading to Unitholders.

Please click on the below link to download a copy of Balmain Trilogy’s statement to all Unitholders.

Balmain Trilogy's Statement

22 November 2011

IMPORTANT INFORMATION FOR PACIFIC FIRST MORTGAGE FUND UNITHOLDERS

VOTE AGAINST THE BRANSGROVE/SULLIVAN PROPOSAL

  • Balmain Trilogy has a clear strategy to protect the interests of Unitholders
  • To prevent erosion of your investment, it is vital that you ensure that Phil Sullivan and his associates do not regain control of the Fund’s assets which include claims against Sullivan and others.
  • The timing of the Bransgrove/Sullivan Proposal has been determined to prevent claims against Sullivan and others which may return significant value to the Fund.

It is important that Unitholders understand that the Bransgrove/Sullivan Proposal is an attempt by Phil Sullivan to regain control of the Fund for his own advantage and to the detriment of Unitholders.

Please click on the below link to download a copy of Balmain Trilogy’s letter sent to all Unitholders.

Balmain Trilogy Letter to Unitholders

Please note: The YELLOW proxy form referred to in the letter has been mailed to Unitholders.

Please call the Balmain Trilogy Client Services Team on 1800 194 500 if you have any questions about the Fund or as to what action to take.

17 November 2011

Bransgrove Proposal – Inaccurate, incomplete and liable to mislead or deceive

We are aware that Unitholders in the Pacific First Mortgage Fund have received correspondence from Matthew Bransgrove, of Bransgroves Lawyers, enclosing a Notice of Meeting of PFMF Unitholders scheduled for 9 December 2011.

The meeting has not been convened by Trilogy or Balmain Trilogy but rather has been convened by Matthew Bransgrove on behalf of an undisclosed group of unitholders. Matthew Bransgrove is Phil Sullivan's lawyer.

All Unitholders will be receiving a letter from Balmain Trilogy regarding the proposal and the six key reasons why Unitholders should reject the Bransgrove Proposal. These documents can be viewed by clicking on the below links.

Trilogy and Balmain Trilogy recommend that you vote:

AGAINST resolution 1
AGAINST resolution 2

by completing the YELLOW proxy form that you will receive in the mail and returning it to Computershare.

Unitholders should ignore all correspondence received from Stacks, Bransgrove, Sullivan or anyone else associated with the Bransgrove Proposal.

Please call the Balmain Trilogy Client Services Team on 1800 194 500 if you have any questions about the Fund or as to what action to take.

Balmain Trilogy Letter to Unitholders

Six Reasons You Should Reject the Bransgrove Proposal

03 November 2011

ASIC examines Phil Sullivan

As previously advised, Trilogy Funds Management Limited (Trilogy) is pursuing legal action against various directors of the former responsible entity of the Pacific First Mortgage Fund (PFMF), including Mr Phil Sullivan.

On 4 October 2011 the Australian Securities and Investment Commission (ASIC) subpoenaed Mr Sullivan to be examined under Section 19 of the ASIC Act. In an effort to defer this examination, Mr Sullivan commenced proceedings in the Federal Court of Australia.

As highlighted in an article (‘Exam Trouble’) published in the Sydney Morning Herald on 2 November 2011, the Federal Court ordered for the first directions hearing to be set for 18 November 2011.

Under Section 19 of the ASIC Act, ASIC has the power to question under oath if ASIC, on reasonable grounds, ‘suspects or believes that a person can give information relevant to a matter that it is investigating’. As such, Trilogy is also pursuing legal action against various service providers and individuals with knowledge of the examinable affairs of City Pacific.

Balmain Trilogy will continue to ensure that Unitholders are kept up to date with developments regarding ASIC investigations concerning Mr Sullivan.

If you have any questions or require any further information regarding this development, please contact the Balmain Trilogy Client Services team on 1800 194 500.

Please click on the below link to view a copy of the article

19 October 2011

PFMF Regulatory Guide 45
- Disclosure under ASIC

Balmain Trilogy is pleased to provide an update on the extent to which Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund and Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) as Investment Manager satisfies the benchmarks set by the Australian Securities and Investments Commission in the Regulatory Guide 45: Mortgage Schemes - improving disclosure for retail investors.

This disclosure represents data as at 31 August 2011.

Please click on the below link to download a copy of the update.

14 October 2011

2011 Tax Statements

Balmain Trilogy wishes to advise that the June 2011 Tax Statements for the Pacific First Mortgage Fund (the Fund) have been delayed. We are conscious of the need for Unitholders to have these statements in order to complete a tax return and wish to apologise for any inconvenience this delay may have caused.

The Statements will be mailed to Unitholders in the week beginning 17 October. In the interim, if it is of assistance to you, we can advise no income tax is payable for the financial year ended 30 June 2011.

If you have any questions or require any further information regarding Tax Statements, please contact the Balmain Trilogy Client Services team on 1800 194 500.

13 October 2011

2011 Annual Financial Report

Balmain Trilogy is pleased to present the Annual Financial Report (Accounts) for the year ended 30 June 2011 for your investment in the Pacific First Mortgage Fund (Fund).

The Fund's auditors, BDO, have reviewed the Accounts and have verified that they have been prepared in accordance with applicable accounting standards. As required the Accounts have been lodged with the Australian Securities and Investments Commission (ASIC).

A copy of the Accounts will be mailed or emailed to Unitholders shortly.

Please click on the below link to download a copy of the 30 June 2011 Annual Financial Report. Should you have enquiries, please call Balmain Trilogy Client Services on Freecall 1800 194 500 or email contact@balmaintrilogy.com.au

04 October 2011

Hardship Update

Please be advised that the hardship redemption period ending 30 September 2011 is now closed.

Applications are now being accepted for the third hardship redemption period ending 31 March 2012. Please note that all hardship payments are subject to the liquidity of the Fund.

If you have any questions or require any further information regarding the Hardship Policy, please contact the Balmain Trilogy Client Services team on 1800 194 500.

30 September 2011

Return of Capital

Balmain Trilogy is pleased to announce that it has processed a return of capital payment to all Pacific First Mortgage Fund (PFMF) Unitholders totalling $8.84 million on 30 September 2011.

Over the coming days, all Unitholders recorded on the register as at 22 September 2011 will receive a capital repayment of 1c per ordinary unit. Unitholders will either receive a cheque or have their nominated bank account credited, in line with their previously outlined payment preference.

We will continue to update Unitholders in regards to further capital repayments via the Balmain Trilogy website.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.

13 September 2011

Investor Committee letter to Unitholders

Representatives of the Pacific First Mortgage Fund (PFMF) Investor Committee (IC) have requested that the following letter be posted to the PFMF website. This letter will also be mailed to PFMF Unitholders.

Please click on the below link to download a copy of the IC’s letter to PFMF Unitholders.

30 August 2011

Misleading and Incorrect Information from ProtectPFMF

Further to Balmain Trilogy’s (BT) announcement on 19 August 2011 ‘Unsolicited letter to Unitholders’, we have issued the following letter to all Pacific First Mortgage Fund (PFMF) Unitholders in relation to the misleading and inaccurate information stated in the unsigned letter by a person or group, referring to themselves as ProtectPFMF.

Trilogy and Balmain Trilogy refute and emphatically deny the allegations made by the hidden authors of the unsolicited letter.

Trilogy has reported the unsolicited letter and associated website to ASIC and will consider commencing proceedings against the authors of the Unsolicited Letter once their identity is established.

There is no requirement for Unitholders to take any action in relation to the material that has been issued by Protect PFMF.

Should you have enquiries, please call Balmain Trilogy Client Services on Freecall
1800 194 500 or email contact@balmaintrilogy.com.au

Please click on the below link to download a copy of BT’s letter to Unitholders

19 August 2011

Unsolicited letter to Unitholders

Balmain Trilogy (BT) is aware that some Pacific First Mortgage Fund (PFMF) Unitholders have received an unsolicited, unattributed and unsigned letter from a person or group, referring to themselves as ProtectPFMF.

There is no clear indication of who is responsible for this correspondence (and the associated website) or what their intentions may be for the Fund. We do, however, note an article in the weekend Financial Review1 which states:

"In the past week Sullivan [ex-CEO of the previous manager of PFMF] and some unit holders have tried to gauge the sentiment of some of Pacific First Mortgage Fund’s 11,000 investors towards Balmain Trilogy.

Sullivan says he may know the answer to that question by the end of next week, and if he garners sufficient grunt from a new website and letter to investors, he may call a meeting to remove Balmain Trilogy."

In the event that any "group" were to gain control of the Fund which is in any way associated with Mr Sullivan (in any capacity) we assume that any legal actions to examine Mr Sullivan (and others) in Court and/or to recover fund assets from any Mr Sullivan entity would immediately cease. We believe that it is essential that these proceedings continue as they may yield significant value for PFMF.

Unitholders should also note that Mr Sullivan was served with an Examination Summons by PFMF's solicitors, Maurice Blackburn Pty Limited, in March 2011. More recently Mr Sullivan has commenced a personal defamation action against Andrew Griffin, the Joint CEO of Balmain Trilogy.

Unitholders should rest assured that whatever Mr Sullivan may do, it will not lessen our resolve to proceed with the public examinations of his conduct.

Additionally, and to make it quite clear:

  • none of the information or statements contained in the letter are supported by BT;
  • the statements in the letter are misleading in relation to material facts and/or incorrect;
  • we are not aware of any unitholder that is in support of the contents of the letter other than those Unitholders associated with Mr Sullivan;
  • we are not aware of how ProtectPFMF obtained your personal details as they were not provided by BT; and
  • nothing will diminish our ongoing commitment to optimally recover PFMF assets.

We will be shortly sending a mail out to all Unitholders refuting the primary allegations made by this hidden group who still, weeks later, refuse to show themselves, if indeed they exist other than in the mind of Mr. Sullivan. There is no requirement for Unitholders to take any action in relation to the material that has been issued by ProtectPFMF.

Should you have any general enquiries, please call Balmain Trilogy Client Services on Freecall 1800 194 500 or email contact@balmaintrilogy.com.au

1. The Australian Financial Review (The Weekend Edition), 13 -14 August 2011, Pg 53

12 July 2011

Fund update and asset review

Balmain Trilogy is pleased to advise that a Fund update has now been dispatched to Unitholders. The update includes information in relation to the timing of capital repayments and a review of all assets in the Fund.

Please click on the below link to download a copy of Fund update and asset review.

08 June 2011

Hardship update

We are pleased to advise that all hardship relief payments for the first hardship redemption period ending 31 March 2011 have now been made.

91% of applications received were approved under the guidelines set out under the Hardship Policy of the Pacific First Mortgage Fund.

Applications are now being accepted for the second hardship redemption period ending 30 September 2011. Please note that all hardship payments are subject to the liquidity of the Fund.

If you have any questions or require any further information regarding the Hardship Policy, please contact the Balmain Trilogy Client Services team on 1800 194 500.

18 May 2011

Fund update

Balmain Trilogy is pleased to advise that a Fund update has been dispatched to Unitholders alongside the payment advice for the April capital repayment.

The update provides an overview of the Queensland and New South Wales markets for residential units and vacant land and shows the effects that the continued decline in these markets has had on the Fund's asset realisation program and availability of funds for return to Unitholders.

The update also provides information on hardship, litigation, Litigation Recovery Rights and the Martha Cove information session held in April this year.

If you have any questions, please contact Balmain Trilogy Client Services on 1800 194 500.

Unitholder Letter
(PDF 492kb)

09 May 2011

PFMF Regulatory Guide 45
- Disclosure Under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in the Regulatory Guide 45: Mortgage Schemes - improving disclosure for retail investors and explains to what extent Trilogy Funds Management Limited (Trilogy) as Responsible Entity of the Pacific First Mortgage Fund (the Fund) and Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) as Investment Manager satisfies them.

This disclosure is correct at 28 February 2011

05 May 2011

Interim Financial Report

The Interim Financial Report for the Pacific First Mortgage Fund (Fund) has now been completed. The Fund's auditors (BDO) have reviewed the financial report and have concluded that they present a true and fair view of the Fund's financial position and financial performance for the six months ended 31 December 2010, as well as complying with the Corporations Act 2001 and applicable Accounting Standards.

While there is no requirement for the financial report to be made publicly available, we believe that it is in the interests of all Unitholders to be advised of the Fund's financial position.

The gross asset value of the Fund as at 31 December 2010 totalled $382.66 million (a decrease of $30.49 million as at 30 June 2010). This represents a net tangible asset value of $0.40 per unit (a decrease of $0.03 as at 30 June 2010). The 31 December 2010 net tangible asset value incorporates the $0.04 per unit ($35.48 million) return of capital in October 2010. Funding of this capital repayment was from the sale of underlying security properties of impaired mortgage loans.

During the period, the Directors agreed terms to extend the Fund's finance facility with the CBA for a further two years.

No units were redeemed and no distributions were made from the Fund during the six months ended 31 December 2010.

Please click on the below link to download a copy of the Interim Financial Report.

21 April 2011

Martha Cove Information Session

More than 60 Pacific First Mortgage Fund (PFMF or the Fund) Unitholders and partners joined representatives from the PFMF Investor Committee on Saturday 16 April for a first hand look at Martha Cove, one the Fund's major assets.

Against a backdrop of blue skies and perfect Autumn weather, Unitholders gained a full understanding of the issues and opportunities for Martha Cove, including a comprehensive perspective of its future development potential.

Balmain Trilogy's Joint CEO, Andrew Griffin, commenced proceedings with a presentation on the history of the site and how the Fund became the majority stakeholder in the precinct. Unitholders were then given a guided tour of the site, which gave them the opportunity to view PFMF controlled assets as well as the development potential of the site as a whole.

For Unitholders who were unable to attend on the day, a video presentation is currently being prepared for webcasting and DVD production. We will notify Unitholders when the video becomes available.

21 April 2011

Litigation Action - Update

Following leave from ASIC, Trilogy Funds Management Limited (Trilogy) has commenced proceedings in the Supreme Court of New South Wales Equity Division for the issuing of Examination Summonses and Production Orders so that the examinable affairs of City Pacific Ltd (receivers and managers appointed) (in liq) can be investigated.

A number of Production Orders have been issued by the Supreme Court of NSW requiring third parties to produce various documents to the Court by 7 April 2011. To date our lawyers have received in excess of ten thousand documents in partial answer of Production Orders. However, a number of other production orders have been adjourned to 28 April 2011.

In conjunction with the issue of Production Orders, Examination Summonses have also been issued by the Court and served upon various individuals with knowledge of the examinable affairs of City Pacific (receivers and managers appointed) (in liq). It is expected that those examination hearings will take place in the Supreme Court of NSW during July 2011.

Subsequent to those examinations, legal advice will be sought to determine the best course of action to recover funds on behalf of Pacific First Mortgage Fund Unitholders.

21 April 2011

Return of Capital - April 2011

Balmain Trilogy is pleased to announce that it will process a return of capital payment to all Pacific First Mortgage Fund (the Fund) Unitholders totalling $8.87 million on 30 April 2011. All Unitholders recorded on the register as at 19 April 2011 will receive a capital repayment of 1c per unit.

As previously stated, the property market in Queensland has continued to retract as demand for vacant land and completed residential dwellings has declined. Depressed property values, combined with the effects of the flooding in Queensland, have caused the projected sales of assets to fall below our forecasts.

As a result, and as previously indicated, the scheduled capital return of $35 million (or 4c per unit) can only be partially paid in April. The residual amount is forecast to be returned by June 2011. However, this may be extended if market conditions deteriorate further and/or there are delays with settlements. We will provide an update nearer that time. We still remain confident that the capital repayment anticipated for October 2011 will be made in full.

As we work to have properties realised in an orderly fashion, we remain conscious of the continued decline in the market and ask Unitholders to understand that our commitment is to provide the optimal return of funds without resorting to fire sales.

As per our undertaking in February 2011, Trilogy Funds Management Limited (Trilogy), as the responsible entity, will reduce its management fee from 1 April to reflect the scheduled repayment of $35 million. That is, Trilogy will be excluding the full $35 million from the calculation of the gross assets of the Fund when calculating the management fee.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.

22 March 2011

Liquidity Update

As we near the close of the first quarter of 2011, Balmain Trilogy continues to progress with its core strategy to complete, add value and realise the Funds Non Development Assets. As indicated in the February 2011 newsletter, challenging market conditions have impacted on asset realisations and the rate of sale.

This has had a direct effect on the Fund's cash position; to enable Unitholders to clearly understand this we have provided the following sources and applications of cash (unaudited) that have occurred from 1 January 2011 to 15 March 2011.

1 January 2011 - 15 March 2011  
Opening Cash Balance (1 January 2011) $7,806,933
Inflows $6,431,661.60
Outflows ($5,746,987)
Closing Cash Balance (15 March 2011) $8,491,607.27
Inflows  
Cash Generated from sale of Assets: $5,991,103.07
Rental Income Earned from Assets: $42,525.96
Interest Income Earned from Assets: $259,655.25
Interest Income from Cash: $104,695.69
Other Income: $33,681.63
Total Inflows: $6,431,661.60
Outflows (excluding unpresented cheques)  
Interest Expense (CBA): ($503,169)
Reinvesting in Maintaining and Improving Assets: (See Note 1) ($3,707,314)
Fund Expenses: ($499,968)
Management Fees ($1,033,652)
Transaction And Misc Fees ($2,884)
Total Outflows: ($5,746,987)
Note 1  
Asset No. 1 ($58,717)
Asset No. 3 ($58,291)
Asset No. 4 ($25,666)
Asset No. 5 ($13,820)
Asset No. 6 ($250)
Asset No. 7 ($8,189)
Asset No. 8 ($1,015)
Asset No. 9 ($16,984)
Asset No. 10 ($2,200)
Asset No. 11 ($345)
Asset No. 12 ($24,587)
Asset No. 15 ($220)
Asset No. 16 ($34,592)
Asset No. 18 ($1,244,849)
Asset No. 19 ($6,041)
Asset No. 20 ($9,718)
Asset No. 23 ($47,733)
Asset No. 24 ($1,217,548)
Asset No. 26 ($45,746)
Asset No. 28 ($11,830)
Asset No. 29 ($26,125)
Asset No. 30 ($250,000)
Asset No. 31 ($26,459)
Asset No. 33 ($81,367)
Asset No. 35 ($1,898)
Asset No. 36 ($25,876)
Asset No. 37 ($285,691)
Asset No. 38 ($71,267)
Asset No. 39 ($110,290)
Grand Total ($3,707,314)

The inflows from asset sales have been below our quarter projections, however we still remain confident that asset realisations moving forward in the next quarter will be aligned to revised projections. As we have detailed previously, it is a commitment not to jeopardise the total return to Unitholders by undertaking a fire sale to generate cash inflow but to ensure assets are realised at their highest possible value.

17 March 2011

Donation - Queensland Flood Appeal

Following Balmain Trilogy Investment Management's $20,000 donation to the Premier's Flood Relief Appeal, we have received the following letter from Premier Anna Bligh.

Our thoughts are with those who have been affected and we will continue to assist in the rebuilding process where possible.

17 March 2011

Litigation Recovery Right

Balmain Trilogy is pleased to announce the issue of Litigation Recovery Rights (LRRs) to Unitholders of the Pacific First Mortgage Fund (PFMF or Fund). For each ordinary unit held in the Fund on 15 March 2011, you will receive one LRR.

The LRR is a separate and transferable entitlement that has been created to ensure all Unitholders retain the right to their pro rata share of any net proceeds resulting from litigation being undertaken by the Fund.

The creation of this entitlement at nil issue price will enable Unitholders to deal in their ordinary units through either a transfer or withdrawal (via the Fund's hardship policy) without affecting their entitlement to participate in a pro rata share of the net proceeds of litigation.

The LRR will have no right to distribution of capital or income of the scheme other than the right to a pro rata share in net proceeds from litigation. The issue of the LRR has not affected your rights and entitlements as a Unitholder in dealing with your ordinary units.

A separate transfer form (Transfer Form - Litigation Recovery Right) has been created for the transfer for LRRs and is available for download by clicking on the below link.

Please note that no action is required unless you wish to transfer your rights to another party.

An updated statement confirming your PFMF holding across both your ordinary units and litigation rights as at 15 March 2011 will be issued to you shortly.

If you have any questions please contact the Balmain Trilogy Client Services Team on Free call 1800 194 500 or email contact@balmaintrilogy.com.au

8 March 2011

Martha Cove Information Session

Balmain Trilogy is pleased to announce that the Martha Cove Information Session will be held on Saturday, the 16th of April 2011. Registration will be closing this coming Friday, the 11th of March 2011.

At this time we will send out a confirmation form to those who have registered, which will enable Balmain Trilogy to best provide on-site amenities and on ground local transport. Final details will be provided upon receipt of your confirmation details.

Please contact Balmain Trilogy Client Services if you have any questions
on 1800 194 500.

REGISTRATION HAS NOW CLOSED

21 February 2011

pfmfnews, Issue #2 February 2011

Balmain Trilogy is pleased to provide Unitholders with the second issue of the pfmfnews.

 In this edition of the newsletter, Balmain Trilogy's Joint CEOs' outline the progress to date and the Fund's strategy for 2011 and beyond. An update on the strategy in action with assets that have been realised to date and the ongoing completion and value add of the Fund's Non Development Assets is provided. Information regarding our approach for the Martha Cove group of assets, legal action, the Capital Repayment for April, the Fund's Hardship Policy and Litigation Recovery Rights are detailed in this newsletter.

Also included in this issue is an address from the Investor Committee addressing Unitholders on their views of Fund's progress to date and their views on Balmain Trilogy. The Martha Cove 'On Site Information Session' will be held in the first half of 2011. To enable us to cater for those Unitholders who wish to attend, please register your interest by clicking on the link below.

If you have any questions, please contact Balmain Trilogy Client Services
on 1800 194 500.

21 February 2011

Hardship Policy & Litigation Recovery Right

Hardship Policy

Balmain Trilogy Investment Management Pty Limited (Balmain Trilogy) is pleased to inform Unitholders of the Pacific First Mortgage Fund (PFMF or Fund) that the Hardship Policy for the Fund has now been finalised.

Following ASIC granting the Fund the required relief, changes have been made to the Fund's constitution to facilitate the implementation of the Hardship Policy. The Hardship Policy enables Unitholders who are suffering from severe financial hardship to apply for redemption from the Fund. Applications will only be considered where the Unitholder is able to satisfy the criteria and requirements detailed in the Hardship Policy.

Unitholders are permitted to withdrawal up to $20,000 each calendar year pursuant to successful hardship redemption applications. Hardship applications will be processed on a semi annual basis, for the periods ending 31 March and 30 September. Please note Hardship withdrawls will only be permitted if there is sufficient liquidity within the Fund and hardship payments may be scaled back on a pro rata basis if the total amount approved for Hardship withdrawals exceeds the available allocation of funds set aside for hardship payments. If payments are scaled back on this pro rata basis, the excess will be rolled over to the next hardship redemption period.

Hardship withdrawals will be at a unit price based on the net asset value of the Fund divided by the number of units on issue at the relevant time. This will ensure all Unitholders are treated equally. For those Unitholders who wish to make a hardship redemption application, it is requested they carefully read through the Hardship Policy and the Statutory Declaration Form before making an application. Please ensure all supporting documentation is provided as incomplete applications will not be able to be processed. Upon receipt of your completed application, your application will be assessed and you will be advised of the outcome.

Please note that in order to participate in the first hardship redemption period ending 31 March 2011, your completed Statutory Declaration Form , together with all required documentation to support your application, must be received by Balmain Trilogy by 18 March 2011.

Should you require additional information or require a copy of the Hardship Policy or the Application Form please call Balmain Trilogy Client Services on 1800 194 500.

Litigation Recovery Right

As previously advised, to ensure all Unitholders are able to obtain the benefit of any future net proceeds that result from the litigation currently being undertaken by the Fund, we will create a separate and transferable entitlement. Each unit in the Fund which you hold on 15 March 2011 will be split into two units going forward, one of which will be a Litigation Recovery Right ('Litigation Recovery Unit').

You do not need to do anything in order to effect the split and, in all material respects, your rights and entitlements in respect of the Fund will not change. There will be no cost to the Unitholder for the Litigation Recovery Unit. The split is being undertaken to ensure that those Unitholders who were affected by the significant losses the Fund suffered will, even if they transfer or withdraw (through the hardship withdrawals process) their ordinary units in the Fund, obtain their portion of any benefit from any net proceeds that may result from legal action currently in process.

All rights you have as a Unitholder in the Fund will remain attached to your ordinary unit, with the exception that the right you have to share on a proportional basis in any net proceeds of litigation taken by the Fund for loss suffered as a result of previous Fund management will attach to your Litigation Recovery Unit. The Litigation Recovery Unit does not restrict Unitholders in dealing with their ordinary Fund units - at any point in time, you are able to transfer your ordinary units, or apply for redemption through the Fund's hardship facility. At the time of any transfer, you can elect whether you also transfer your Litigation Recovery Units or whether you hold on to them.

The PFMF Hardship Policy and Hardship Statutory Declaration Form can be downloaded by clicking on the following links.

19 January 2011

Queensland Floods

In the last two weeks we have seen the total destruction of so many homes and businesses in the Brisbane area.

We understand that these floods have affected a number of Unitholders and their families living in Brisbane and surrounding arrears.Our staff in Brisbane have also been personally affected by this natural disaster.

To assist in the recovery effort, Balmain Trilogy has made a donation of $20,000 to the Flood Relief Appeal. Those who wish to aid through donation can visit the Premiers Disaster Relief Appeal website (www.qld.gov.au/floods)

The flow on effects of this natural disaster will not be able to be quantified just yet; it is going to be a long rebuilding process, not just for Brisbane but for the state of Queensland. Balmain Trilogy remains very conscious of the effects that this will have on the recovery of the Fund's assets in Queensland.

Our thoughts are with all of those affected.

12 January 2011

Flood Notice

Due to the flooding in Brisbane, communications with Trilogy Funds Management may be disrupted temporarily.

Please call 02 8028 2828 if you require assistance.

23 December 2010

Hardship Policy

Following approval from ASIC, Balmain Trilogy are now making the required amendments to the Fund's constitution to allow for the Hardship Policy to be implemented.

Applications for Hardship Withdrawals will be dependent upon the liquidity of the Fund and will only be considered where the applicant is able to satisfy the Hardship Policy Criteria.

Details of the Hardship Policy including the Policy Criteria and Application Guidelines will be available to Unitholders in the New Year.

16 December 2010

PFMF Regulatory Guide 45 - Disclosure Under ASIC

The downloadable PDF provides an update on the benchmarks set by the Australian Securities and Investments Commission in the Regulatory Guide 45: Mortgage Schemes - improving disclosure for retail investors and explains to what extent Trilogy Funds Management Limited ('Trilogy') as Responsible Entity of the Pacific First Mortgage Fund (the "Fund")and Balmain Trilogy Investment Management Pty Limited ("Balmain Trilogy") as Investment Manager satisfies them.

This disclosure is correct at 31 October 2010.

06 December 2010

Investor Information Sessions

A series of Investor Information Sessions that took place across five major cities has now concluded and was attended by more than 1500 unitholders.

These sessions were conducted to allow the Balmain Trilogy team to provide an update on the current situation of the Fund and importantly, enable unitholders to ask questions about their investments.

The meetings were chaired by Rodger Bacon, joint CEO of Balmain Trilogy and addressed by joint CEO Andrew Griffin, this provided unitholders with a clear, open and transparent overview of the past, present and future activities of the Fund.

Mr Griffin's presentation addressed four areas and a summary of the critical points are as follows:

1. The history and fighting back

  • Nature of the Fund and how it differed substantially from the way it was portrayed
  • Lack of sound corporate governance and oversight from the previous Investment Manager and Responsible Entity
  • Illusory returns from accounting treatment
  • How we are bringing action against those responsible - ASIC granting leave
  • The involvement of IMF in funding these actions

2. The assets

  • 17 loans that have currently been realised - recovery in excess of $145 million
  • 18 non-Martha Cove loans that still remain - the requirement of significantly more work to achieve an optimal sale
  • 6 loans relating to Martha Cove - how to achieve the best development outcome

3. The present and immediate future

  • Outcomes of last unitholders meeting - which despite 81% support from unitholders that voted fell short of the required 75% of units issued to be passed
  • Future payments to unitholders - target to return $295 million by Oct 2012, including the $35million received by unitholders in October 2010.
  • Hardship payments - ASIC approval to commence hardship payments
  • Improving unitholder communications

4. The future of your fund

  • Strategies available to the assets of your Fund
  • How Balmain Trilogy will maximise the value on the non-Martha Cove assets
  • The structured development of Martha Cove - selection, structure, returns, authority, skill, money and choice.

Due to legal reasons the transcript of the Sydney Information Session has been removed from this website.

12 November 2010

Gold Coast Investor Information Session

Balmain Trilogy wishes to inform Unitholders that the Gold Coast Information Session that is to be held on 16 November 2010 has reached full capacity and is now closed to any further reservations. For those Unitholders in the South East Queensland area who wish to attend an Information Session, we ask if they please attend and reserve their seat for the Brisbane Information Session that is to be held on Monday 22 November.

03 November 2010

PFMF Consolidated Annual Financial Report for the year ended 30 June 2010

The Financial Report (Accounts) for year end 30 June 2010 for the Pacific First Mortgage Fund (Fund) have now been completed. The Fund's auditors, KPMG, have reviewed the Accounts and have verified that the Accounts have been prepared in accordance with applicable accounting standards. As required the Accounts have now been lodged with ASIC.

As at 30 June 2010 the gross assets of the Fund were $413.15 million (a decrease of $107.91 million from 30 June 2009). As at this same date the net assets of the Fund were $382.47 million (a decrease of $43.77 million from 30 June 2009). The net assets attributable to each unit was $0.43 (a decrease of $0.04 from 30 June 2009).

Whilst the Fund recorded further impairments on gross mortgage assets during the year of $44.50 million, the Fund recovered $108.85 million which enabled the CBA facility to be reduced by $61.8 million to $30 million at 30 June 2010. This significant reduction in the Funds finance facility also enabled Balmain Trilogy to negotiate and renew the facility for a further 2 years and to allow repayment of capital to unitholders, with the first payment of 4c per unit being returned in October 2010.

The reduced value of the gross mortgage assets has been affected by the further diminution in value of several unimproved/undeveloped assets that continue to be affected by adverse market conditions, while other assets in the portfolio continue to perform inline with our original projections. The valuations of all assets have undergone a due process with values being obtained from independent valuation firms and then verified by the Fund's Auditors. We will continue to actively work on enhancing the value of unimproved/undeveloped assets where permitted and continue to manage completed assets to ensure the maximum value is returned to the Fund.

No units were redeemed and no distributions were made during the year ending 30 June 2010. A copy of the Consolidated Annual Financial Report will be distributed to all Unitholders via the mail. In addition it can be downloaded by clicking on the following link.

28 October 2010

Investor Information Sessions

BalmainTRILOGY will be holding a series of Investor Information Sessions across 5 major cities to provide an opportunity for Unitholders to better understand their Fund. These sessions have been established to allow the BalmainTRILOGY team to provide an update on the current situation of the Fund and also allow Unitholders to ask questions about their investment.

The Joint CEO's and other key executives from BalmainTRILOGY will be attending. These sessions are scheduled to last for 2 hours and will commence at 10am on the day and be followed by light refreshments. Please note that registering your interest is essential as seating is limited. These sessions are informal and are not another Unitholder Meeting requesting a vote.

Please understand the costs for these sessions are being paid directly by BalmainTRILOGY and NOT by the Pacific First Mortgage Fund.

The meeting has now passed

28 October 2010

Financial Accounts

Trilogy and Balmain Trilogy are currently in the process of completing the PFMF Consolidated Annual Financial Report for the year ended 30 June 2010 with the Fund's Auditors. We are very conscious that the accounts have been delayed but the assessment of values must be undertaken carefully and with regard to due process. Once the accounts have been finalised and lodged with ASIC on 1 November 2010 they will be published on this website and mailed out to all Unitholders with expected delivery by mid November.

18 October 2010

PJPL Offer - Update

Balmain Trilogy has now been advised that Project Junior Pte Ltd (PJPL) will waive all conditions relating to its Offer effective from 20 October 2010.  Processing of acceptances for payment will commence within 10 days from 20 October 2010. 

PJPL has also confirmed that the offer period has been extended to 5.00 pm on 10 December 2010 unless closed earlier.

PJPL have issued a letter to all Unitholders confirming the above and copy of the letter can be viewed by clicking on the below link.

13 October 20100

Return of Capital

Balmain Trilogy is pleased to announce that the proposed capital repayment totalling $35.481 million has now been processed. All Unitholders will be receiving a capital repayment of $0.04 per unit held in the Fund. For those Unitholders who have nominated for payment to be made electronically, funds will start to appear in their accounts from today. If the Fund's Registrar does not hold your account details on file a cheque has been drawn and will be mailed to Unitholders within a week.

A further capital repayment is scheduled for early in the new year and we will be advising Unitholders of this closer to the date.

05 October 2010

Offer to Purchase at 30c - Update

Further to Balmain Trilogy's announcement on 13 September 2010 regarding an offer from a group of unitholders to purchase units in the Pacific First Mortgage Fund, we have now received further information from the Group's coordinator Mr Tom Powers.

Tom Powers has now confirmed the Groups offer has closed as they have reached their unit limit. They will no longer be taking any further transfers and any transfers already sent to them will be returned to those Unitholders unprocessed.

29 September 2010

Hardship Policy - Update

Trilogy and Balmain Trilogy are aware that a number of Unitholders are suffering from severe financial hardship and would benefit from hardship relief. To assist those unitholders in need, Trilogy has now sought legal advice to implement a Hardship Policy that would allow for hardship relief without disadvantaging those Unitholders who do not qualify or seek relief. The implementation of a Hardship Policy would require changes to the constitution that would allow for units to be redeemed to ensure the underlying value per unit would be maintained and is subject to ASIC approval. The nominated changes to the constitution are allowed to be made in Trilogy's capacity as the Responsible Entity of the Fund.

We have sought for an urgent determination of the Fund's Hardship Policy by ASIC. Further details regarding the Hardship Policy will be provided once relief from ASIC is obtained

24 September 2010

PJPL Offer - Update

Balmain Trilogy has now been advised that the Project Junior Pte Ltd (PJPL) Offer to acquire units in the Pacific First Mortgage Fund has been extended to the earlier of 21 October 2010 or PJPL receiving acceptances for 435 million units.

PJPL have also confirmed that they have waived all of the conditions relating to its Offer except the 10% minimum acceptance condition. As at 22 September 2010, PJPL have received acceptances of 27.7 million units representing 3.1% of the total units on issue.

Balmain Trilogy also advises that Unitholders who accept the offer will still receive the upcoming capital repayment of 4 cents per unit in early October. If the minimum acceptance condition is satisfied or waived the PJPL offer price will be adjusted accordingly to 22 cents per unit.

PJPL have now issued a letter to all Unitholders providing a status update of their offer and copy of the letter can be viewed by clicking on the below link.

Neither Trilogy nor Balmain Trilogy recommends that Unitholders either accept or reject the PJPL offer. However, the Liquidity offer does provide unitholders with a choice to exit the Fund immediately. Balmain Trilogy advises Unitholders to seek professional financial advice if any aspect of the offer is unclear to them.

21 September 2010

Payment of 4c per unit and Tax Statements

- CHECK YOUR BANK DETAILS -

Balmain Trilogy are pleased to announce that a capital repayment of $35.481 million will be made to all Unitholders. This will in effect be a capital reduction of 4 cents per unit and the payment will be made in early October.

Unitholders will shortly receive a letter providing more details of the capital repayment and also their individual June 2010 Tax Statement. To facilitate payments to all Unitholders as quickly as possible, it is important to ensure that the bank accounts details we hold are correct. To assist with this, included with the letter is a Direct Credit form that has been pre-populated with each Unitholders bank account details currently held by Computershare. If the bank account details on this Direct Credit form are incorrect please write the correct details in the space provided, and ensure that all relevant signatories sign the form and return it in the reply paid envelope provided within 7 days. Unitholders are not required to do anything if the bank account details listed are correct. Please note that Computershare can only process original forms that are received and signed by all signatories to the original unit application.

If you have any questions please call the Client Services Team on 1800 194 500.

17 September 2010

Clarification of Litigation Settlement with Atkinson Gore

Balmain Trilogy confirms that it has reached an out of court settlement with Gore and other companies. After 18 months of defending various claims, some of which sought more than $300m in damages, the actions will now be discontinued saving the Fund several million in legal costs. Balmain Trilogy believes that the out of court settlement is in the best interest of unitholders.

Settlement of these litigation actions does not in any way affect the ability of Trilogy and Balmain Trilogy to bring actions against parties that have contributed to the significant losses of the Fund.

Recent public commentary that the settlement has wiped away or will result in a further loss to the Fund of $190m is wrong. There will be no change to the value of the Fund as a result of the settlement other than a slight increase in value because of the removal of a contingency for legal fees to defend certain proceedings that have now been discontinued.

Balmain Trilogy's lawyers will now seek to formalise the discontinuance of the actions against the Fund with the trustees in bankruptcy for Messrs Gore and Atkinson and, once that is done, all substantive litigation involving Messrs Atkinson and Gore, and the Atkinson Gore companies, will come to an end.

16 September 2010

CEO's Address

Following the Meeting of Unitholders that was held on 1 September, we provided a copy of Andrew Griffin's address to Unitholders. The address by Mr Griffin provided an opportunity to present the Funds current position, the issues and problems that it has faced and those resolved and the proposed path forward. We trust that all unitholders who were unable to attend the meeting will find Mr Griffin's address beneficial.

Please note the address has been edited for the purposes of publication on this website.

13 September 2010

Offer to Purchase at 30c

Balmain Trilogy has become aware of an offer from a group of unitholders to purchase units in the Pacific First Mortgage Fund at $0.30. The purchasing group, which appears to be represented by Tom Powers, has made an offer without any consultation with either of Trilogy or Balmain Trilogy. Given this lack of consultation we are unable to provide any comments as to the capacity of the intending purchasers to complete the purchases of units. We also note that the offer conditions are not clear in respect of either the identity or capacity of the purchaser/s. As such we are unable to confirm either the maximum number of units the group intends to acquire or whether the group has the capacity to complete the purchases. We are also unaware on what basis the group intends to select which acceptances it will honour.

Balmain Trilogy advises Unitholders to seek professional financial advice if any aspect of the material that has been published by Mr Tom Powers is unclear to them.

06 September 2010

Requisition has been withdrawn

Balmain Trilogy has been requestioned by 133 members to convene a meeting of unitholders to consider 12 separate resolutions regarding changes to the Fund's constitution. The statement provided by these members was published on this website on 31 August 2010. Balmain Trilogy now confirms that it has received written confirmation from 37 members withdrawing their request to convene a meeting of unitholders to consider the 12 proposals. As the number of members now calling the meeting is below the requisite number of members required, Balmain Trilogy considers the requisition to be withdrawn and will not be facilitating the meeting.

Should you have any questions please do not hesitate to contact the Client Services Team on 1800 194 500.

03 September 2010

Liquidity Offer Remains Open

Morgan Stanley Special Situations Fund III (MS SSFIII) through its subsidiary Project Junior Pte Ltd (PJPL) has today advised that their liquidity offer to Pacific First Mortgage Fund Unitholders remains open. Whilst one of the Approval Conditions was the passing of Resolution 1, PJPL have confirmed that they are neither waiving the Approval Condition nor withdrawing the offer and PJPL will continue to leave the offer open, reserving its rights to withdraw the Offer, until the closing date of 30 September 2010. If the Approval Condition is not waived on the close of the Offer all acceptances will be void.

Neither Trilogy nor Balmain Trilogy recommends that Unitholders either accept or reject the PJPL offer. However, the Liquidity offer does provide unitholders with a choice to exit the Fund immediately. Balmain Trilogy advises Unitholders to seek professional financial advice if any aspect of the offer is unclear to them.

02 September 2010

Balmain Trilogy receives 82% unitholder support, falls short of required 75% majority

The Unitholder meeting of the Pacific First Mortgage Fund (Fund) held in Brisbane yesterday was attended by over 680 Unitholders. Balmain Trilogy, the Investment Manager of the Fund, received the majority support of Unitholders in respect of Resolution 1, a resolution designed to enable full implementation of the proposed New Strategy for the Fund.

There were 3 resolutions put to Unitholders as follows:

Resolution 1 would have allowed changes to the Fund's constitution to enable:

  • The development of selected fund assets to achieve a better outcome for all investors;
  • The commencement of a Hardship Redemption Policy;
  • Separate non-redeemable units in respect of recoveries from legal proceedings to ensure unitholders benefit from any litigation recoveries regardless of whether they accepted or declined future redemption offers and
  • An amended management fee structure to better align the interests of the manager and the unitholders.

Resolution 2 enabled Unitholders to elect whether redemptions are to be made at either current value or issue price.

Resolution 3 was a resolution proposed by certain member of the Fund (and was not supported by Balmain Trilogy) which sought to reduce the manager's fee from 1.5% of the gross assets to 1.25% of the net assets of the fund.

Resolution 1 received the support of 82% of all unitholders by number and 67% of all units voted. Unfortunately, the voice of 82% of unitholders was not sufficient and the vote fell short of the required 75% majority needed to pass the Resolution. However, with 82% of unitholders voting in favour of Resolution 1, Balmain Trilogy believes that this confirms strong Unitholder support for the New Strategy.

Resolution 2 was conditional upon Resolution 1 being passed, hence was not effective and Resolution 3 was soundly defeated (see below vote results).

The consequences of Resolution 1 not being passed are as follows:

  • Hardship payments cannot be made under the Fund's present constitution because a unit price based on underlying asset values cannot be struck. Balmain Trilogy is urgently seeking guidance as to how to commence Hardship payments;
  • The management fee will remain at 1.5% and not be reduced to 1%
  • There will be no introduction of performance/incentive fee for Balmain Trilogy to act as development manager in respect of some of the Fund's assets; and,
  • Unitholders will be denied the individual choice as to whether they can accelerate or delay their exit by way of future redemptions from the Fund.

Balmain Trilogy confirms that, notwithstanding the failure of Resolution 1, it is committed to the following:

  • Targeting to repay $295m, or 71% of the current assets of the Fund, to Unitholders prior to October 2012.
  • A pro rata payment to all unitholders of $35m in October 2010;
  • Returning any excess liquidity to Unitholders promptly and regularly;
  • Will continue to act in the best interests of all Unitholders in maximizing the value of recoveries and no fire-sales will occur;
  • Will continue to work to find ways to ensure the maximum returns from assets such as Asset 34 or Martha Cove are achieved. Trilogy and Balmain Trilogy will continue to act in the best interests of Unitholders and if that means developing assets, then Trilogy will appoint appropriately skilled development managers where it considers it to be in the best interests of Unitholders; and
  • Will improve communications to all Unitholders.

Trilogy and Balmain Trilogy will continue to act in the best interests of Unitholders and will continue to both maximise the value of the Fund and minimise the time period for redemptions to occur.

OFFICIAL VOTING RESULTS

Resolution 1 No. Units %
Votes cast 'FOR' the motion 442,656,102 66.72
Votes cast 'AGAINST' the motion 220,790,190 33.28
TOTAL VOTES CAST 663,446,292 100.00

Resolution 2 No. Units %
Votes cast 'FOR' the motion 434,400,751 65.73
Votes cast 'AGAINST' the motion 226,524,071 34.27
TOTAL VOTES CAST 660,924,822 100.00

Resolution 3 No. Units %
Votes cast 'FOR' the motion 234,019,673 35.92
Votes cast 'AGAINST' the motion 417,515,523 64.08
TOTAL VOTES CAST 651,535,196 100.00

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