Decision on Henderson bankruptcy adjournment reserved

Tuesday 31st May 2011

A decision on whether to adjourn bankruptcy proceedings on Auckland property developer David Henderson has been reserved.

Henderson, who was not present for the hearing at the High Court in Auckland, is seeking to put forward a new proposal to repay creditors, who are owed about $130 million.

He has proposed to pay them $1.5 million in three payments between now and December 2012, money he is earning through consultancy work for the Victoria Park Markets development.

To do this he needs an adjournment to the bankruptcy proceedings brought on by the Inland Revenue (IRD), which is owed about $3.6 million, and the Bank of Western Australia, which is owed about $33 million.

Associate Judge David Abbott reserved his decision at the end of a day-long hearing.

Much of today's discussions centred around the vote on Mr Henderson's new creditor proposal last month.

That vote, which passed the required 75% threshold by just 0.6%, was questioned today by the IRD and Downer Construction, which said it was also a creditor of Mr Henderson.

Henderson was given extra time by Judge Jeremy Doogue in April to get creditors' agreement to stave off bankruptcy, and his lawyer Daniel Grove said that had been secured.

"It's clear that his honour contemplated that if the proposal was accepted by creditors at second meeting, the matter would move forward to a hearing.

"We've had the meeting and we've got the votes."

Daniel Hughes, a lawyer for Downers, which says it is a $3.6 million creditor, says they were excluded from voting at the April meeting, and its votes would have defeated the proposal.

Grove said the decision to exclude Downers from the vote by a trustee dealing with Henderson's debts was correct as Downers' debt had been settled in August last year and it hadn't appealed that decision.

A further dispute arose over a document signed by Mr Henderson's trustee saying Downers had been allowed to vote. Efforts made to correct this document were unsuccessful as the trustee is currently overseas.

The IRD had also made an application to have the court determine whether last month's creditor vote met voting threshold requirements.

In addition to the issue with Downers, IRD lawyer Paul Murray said there was doubt over the amount of debt held by some creditors, which he said appeared to have grown significantly more than anticipated since the first proposal was made.

Murray also said there were doubts over ASB Bank's votes as he said no claim form had been submitted.

Grove replied that there was no issue as all voters had been formally allowed on the day and the only way they could be challenged was an official appeal.

NZPA

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