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Monday Nov 07, 2011

Controversial ski resort up for auction after appeal court judgement

South Africa's only ski resort will go under the hammer after a successful judgement was handed down by a full bench in the Supreme Court of Appeal on the 30 September 2011.

The troubled resort was involved in a three year legal wrangle when the Van Eck Family - which owned Tiffindell - agreed to sell it to Tiffski Property Investment, which in turn promised to invest in the development and lease it back to the Van Eck family.

Ivan van Eck, the founding director of Tiffindell Ski Ltd, blamed David Taylor, Director of Emperica Marketing who controversially tried to bring Starbucks to South Africa, for the bankruptcy saying that once Taylor got involved in a deal with the ski resort, it was the beginning of the end.

Van Eck sold a controlling share to Taylor and Le Roux under Tiffski Properties to recapitalise in a R22-million transaction in 2007. But Van Eck raised questions about the transfer of assets between Tiffski and Tiffindell, as well as underpayment by Taylor for Van Eck's shares; Van Eck was subsequently fired as managing director. He claims that he lost R11-million in the deal. Other investors also threatened legal action against the directors of both Tiffindell and Tiffski.

"With regard to my personal involvement in the matter, you should note that I was never a director of Tiffindell Limited and that I was not personally the subject of any litigation," he said. "I was a director of the property holding company, Tiffski (Pty) Ltd until January 2010."

When the deal is believed to have turned sour amid financial disputes between the Tiffski directors, the company was liquidated and liquidators were appointed to bring a court action to reverse the deal. The High Court in Johannesburg ruled against the liquidators who immediately appealed against its decision.

The recent Appeal was successful and now Auction Alliance has received instructions from joint liquidators, Gavin Gainsford and Shawn Williams of KPMG, to sell the controversial ski resort.

According to the auctioneers, all operations ceased 24 months ago, while the resort was subject to legal wrangling that was finally resolved, giving the liquidators powers to sell.

The resort, established in 1993, covers 101.8 hectares and is situated on the slopes of the Ben Mcdhui Mountain - which at 3001m above sea level is the highest peak in the Eastern Cape - in the southern Drakensberg near the Lesotho border. Snow is a regular feature in the winter months and the resort was run as a successful ski lodge since being established in 1993. Numerous improvements to the property include a main lodge, offices, shops, bars, restaurant, lounges, hotel rooms and chalets, along with staff accommodation, workshops and sheds. Considering that no maintenance has taken place since 2009, the interior is in a surprisingly fair condition but the exterior needs attention.

Electricity is available from Eskom and water is provided via the numerous natural springs in the area. Minor amenities are available in the picturesque town of Rhodes, which is situated 26 km away, while major amenities such as financial institutions, shops and medical facilities can be found in Alliwal North, situated approximately 150Km away. The only competitor, running a similar operation albeit on a smaller scale, is situated 300km away in Lesotho.

"While the property would need significant capital investment to restore it to its former glory, this is still a once off opportunity to acquire a unique investment property in a pristine mountain setting." comments Bradley Stephens, National head of Legal for Auction Alliance.

The auction will take place in Sandton, Johannesburg on the 24th November 2011.

Auction Alliance Press Release


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