Broke developer gets last chance

Property developer Ray Durney, whose companies already owe $13 million to more than 250 creditors, has been given until May to avoid going into bankruptcy.

Two companies owed more than $200,000 applied to the High Court at Napier late last week in an effort to have the 76-year-old Hawke's Bay man adjudged bankrupt, but he was given until 2pm on Friday to propose a scheme of payment.

The debts comprised about $134,000 owed to Gorman Vernel International Freight Delivery by Mr Durney's firm Aquahaven, which went into liquidation in December, and about $80,000 owed to the Blanda Trust over a property purchase.

Two other creditors supported the application – Kiwibank, owed $2.4m by Durney Land, which was put in liquidation in December, and Contact Energy, owed about $20,000 for Mr Durney's personal power supply.

Another creditor – PricewaterhouseCoopers, the liquidator of Durney Land, which is owed $1.9m – joined the application.

Mr Durney's lawyer, Gerald McKay, sought an adjournment of one month on Friday, saying Mr Durney was willing to settle the accounts and that it was "clearly better" if he was not bankrupted.

He told the court that Mr Durney believed he could pay the Blanda Trust through an advance from merchant bank Kelt Capital, and the Gorman Vernel debt could be paid if he sold a boat worth $50,000, with the balance to be paid through "cropping" his property portfolio.

No information on Mr Durney's assets and liabilities was provided to the court. Mr McKay said this was difficult to obtain at short notice.

The BNZ building in Hastings, worth more than $2.5m, would soon be sold and would clear up the Kiwibank debt, he said. Mr Durney was an experienced property manager and a good negotiator, and bankruptcy would prevent him assisting in selling the properties.

Mark von Dadelszen, acting for Blanda Trust, told the judge he had no faith in Mr Durney's promises.

"Precisely the arguments put before you – `Believe me, trust me, I know what I'm doing, I'll make sure the creditors will be paid' – are the same statements made to creditors over the last six to 12 months."

The suggestion that only Mr Durney could supervise the "harvesting" of his properties was "patently ridiculous" and "stretching credibility". The official assignee could take care of that, Mr von Dadelszen said.

Associate Judge David Gendall said Mr Durney's application had "come extremely late in the piece". With "considerable reluctance", he gave him "one last adjournment in this matter" to put his affairs in order. He has until May 6 to come up with a proposal.

Mr Durney, who was sole director of Durney Land, said he was confident the creditors would be paid. "We'll get there one way or another."

He said liquidation was "a very destructive process". "Liquidators have no commercial sensitivity. They just want to sell.

"They take all the rent, so of course you get in default, and then you get mortgagee sales. It snowballs.

"I have to say the creditors have been very supportive".

- © Fairfax NZ News