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$40m Horse Syndicate Loss Behind Builder Collapse
The most significant factor behind the collapse of Beechwood Homes (the largest project home builder in NSW) "was not bad weather or the building industry downturn, but a $40 million loss related to a horse racing syndicate associated with founder Larry King" revealed the company's administrator Armstrong Wily. The administrator noted Beechwood's financial position "deteriorated after 2005 when the company wrote-off a $40 million loan related to the bloodstock investment" reported The Australian Financial Review. The bloodstock write-off occurred "for no apparent consideration" & the administrator has been "unable to identify any benefit to the company from doing so". The report added the horse racing investment "might be in breach of directors' duties" because it was made "without obtaining any or any adequate security to protect the interests of the company" & without documents to verify how the money was spent & who owned the horses.