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Westpac will now abide by a High Court’s decision on former Wellington property developer David Blackmore’s bailout plan.
Owed $330,000 by Mr Blackmore, the bank originally opposed his plan to pay back creditors.
In Wellington High Court Associate Judge David Gendall reserved his decision after a hearing yesterday on whether or not to approve Mr Blackmore’s plan.
Mr Blackmore once owned the iconic James Smith’s corner in Cuba St.
He owes creditors $26.9 million but his plan to fight off bankruptcy would involve paying back only $100,000.
That would mean creditors owed more than $10,000 would be paid a third of cent back in the dollar, while four creditors owed less than $10,000 each will be paid 25 cents in the dollar.
Mr Blackmore’s lawyer Paul Chisnall says petitioning creditor Ullrich Aluminium will abide by the court’s decision, as will Westpac.
Mr Chisnall told the court the $100,000 offer was not insignificant.
“The current status is continuing until the court either approves or rejects the plan. We should have a decision very quickly from the judge,” Mr Chisnall told NBR ONLINE after the hearing.
He says if Associate Judge Gendall accepts the plan, Mr Blackmore will stave off bankruptcy, provided he meets his obligations.
Mr Blackmore’s current employer and the new owner of the James Smith’s corner, Mark Dunajtschik, has underwritten the proposal by offering the $100,000.
Mr Dunajtschik has employed Mr Blackmore to manage the redevelopment of the building, paying him about $40,000 a year.
Associate Judge Gendall’s decision is expected before Christmas.