Property developer David Henderson placed in bankruptcy

MARTIN VAN BEYNEN
Last updated 16:59 29/11/2010

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The High Court in Christchurch has placed controversial Christchurch developer and tax combatant David Henderson in bankruptcy.

The bankruptcy ordered about 4pm today by Associate Judge Rob Osborne was the final chapter of a saga in which Henderson's property and hospitality empire crumbled under the weight of debt.

By his own account Henderson, who was also bankrupted in 1996, has gross personal debts of about $165m and $86m after the sale of secured assets. The debts come mainly from personal guarantee of loans to his companies.

The businessman came to national prominence in the late 90s when he wrote a book about his tax difficulties and in which he accused the tax department of hounding him into ruin. The book was made into a film.

Henderson's biggest project was a $2b development near the airport in Queenstown which was done under the auspices of his companies Five Mile Holdings and Property Ventures. His companies owned buildings in Dunedin and Invercargill and the Hotel So and Living Space businesses.

His hospitality empire was based around bars in Sol Square in Lichfield Street.

Creditors applied to put the controversial businessman in bankruptcy over debts of $70 million . Henderson had successfully sought a number of adjournments to the application and sought a stay today to allow him to present a compromise proposal to creditors.

Although the proposal remains confidential submissions presented in court today show its main thrust is for Henderson to be allowed to pursue a number of other development opportunities on borrowed money so creditors can  get some of their money back.

Henderson's counsel Austin Forbes QC told Judge Osborne Henderson had polled creditors and believed he might be able to get sufficient agreement to have a deal voted in.

Counsel for the creditors disputed figures provided by Forbes and said the proposal did not stand a chance of being successful as the petitioning creditors had the final say.

The creditors are FM Custodians, on behalf of Canterbury Mortgage Trust (CMT), Equitable Property and Finance, South Canterbury Finance, Bank of New Zealand, Strategic Finance and Havenleigh Global Services Ltd.

In 2008, the Christchurch City Council paid about $17m for four of Henderson's inner- city properties after he struggled to make mortgage repayments. Henderson has options to buy back the properties although the court was told Henderson had been unable to pursue an option over the former Para Rubber Site.

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- The Press

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