Debts called in on NZ property developer deals

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NZ Herald reports

Who will mourn the financial ruin of private property developers? Each week brings the fall of more members of this high-living, once-powerful band.

One day, it seems, they have the best clothes and are seen about town with the best-looking models, behind the wheels of the raciest cars.

Now they are crumbling under their creditors and even hocking their bling on the internet.

This week, Starline Group’s Jamie Peters announced his bankruptcy after putting his name to about $1 billion worth of development work.

He’s the developer who was selling his belongings on the internet a while back, including Cartier and Rolex watches, furniture and even his garden palms.

Peters estimated he had sold more than 1500 properties, starting in 1994 on residential work, buying and selling residential units then moving on to bigger commercial jobs and eventually developing part of Gulf Harbour, Quay Park and big Auckland office blocks.

“I am a proud man and did not want to become bankrupt. I have not run away from my problems. I have dealt with almost every funder face to face over the last two years and with most of them we have resolved the issues,” Peters says.

But he could not resolve problems with funder Bank of Scotland International, nor repay $100 million in loans.

Peters is not alone.

Princes Wharf’s David Henderson of Kitchener Group has Inland Revenue lodging a bankruptcy application against him in the High Court at Auckland for $3.5 million.

Christchurch’s David Henderson – also a developer – has had three of his companies put into liquidation. Others are in receivership and the 31ha $1 billion Five Mile project at Frankton Flats outside Queenstown lies barren.

Mark Bryers, former Blue Chip boss, went bankrupt this month and to add to the misery of this sorry tale, two Blue Chip investors lost their High Court case last week.

Nigel McKenna of Melview Group has two companies in receivership, failed to proceed with Flat Bush in Auckland and has scaled back work.

Greenlane’s Neville Mahon has trouble at the Fiji Beach Resort & Spa managed by Hilton. Last month, his Denarau Investments and Denarau International went into receivership. Investors who own apartments there are working with receivers KordaMentha.

Patrick Fontein’s Kensington Park went to KordaMentha for a time, then rich industrial developer John Sax bought it. He plans to finish the Orewa housing project but in a scaled-back format.

Korean developer Dae Ju wanted to build a $450 million 67-level Elliott apartment tower almost up to the Sky Tower. It was planned to be ready before the 2011 Rugby World Cup.

Asked about progress, New Zealand representative and lawyer Marcus Beveridge this week responded: “No building yet, busy trying to get projects out of the ground.” READ MORE

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