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Blue Chip company sign - Source: ONE News -
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Around 250 Blue Chip investors hope to regain some of their losses through a six-week hearing in the High Court at Auckland that started on Monday.
The action targets three property development companies which are demanding investors buy central city apartments they cannot afford, The New Zealand Herald reported.
Barrister Paul Dale has brought 34 representative cases of investors who mostly borrowed against their homes to put funds into unusual agreements through Blue Chip.
Dale said the investors were led to believe the "joint ventures" and "premium income products" were loan products.
They put deposits of around 10% down on yet-to-be built apartments and paid an exorbitant range of fees. Blue Chip in turn paid them a return of 16% for the use of their money.
Some invested in multiple apartments.
When the developments were completed Blue Chip was to buy the properties and return the investors' deposits.
But when the scheme collapsed in February 2008 the investors were left holding sale and purchase agreements for the apartments which the developers were now trying to enforce.
The action relates to four central Auckland buildings which are now built.
