Creditors of New City Residence Investment Corp, Japan’s first failed real estate investment trust, rejected Lone Star Funds’ receivership plan, opening the way for a rival proposal from Daiwa House Industry Co.

New City executive Jun Arai told?Bloomberg about the results of the vote following the meeting of creditors in Tokyo today.

Osaka-based homebuilder Daiwa House has asked to take over as the receiver of New City, which filed for bankruptcy protection in October, said Hirotaka Uruma, the chief financial officer of Daiwa Morimoto Asset Management Co., a Daiwa unit which manages property trusts. Daiwa House wants to merge New City’s assets with those of its REIT, BLife Investment Corp., Uruma said.