Judge gives Serepisos three days to find $4 million

UPDATED: Five of Terry Serepisos' companies narrowly escaped liquidation at the High Court in Wellington this morning with a three day reprieve to find $4 million.

The companies, part of Mr Serepisos' Century City group, owe Inland Revenue and ACC a combined $4,011,097.

But the reprieve may be brief.

Justin Toebes, acting for Mr Serepisos, sought an adjornment of six weeks. Associate Judge David Gendall gave him only three days meaning Thursday morning is shaping up as a make-or-break for the troubled developer.

NBR understands from a source inside the Serepisos camp that hopes are dimming a promised loan from Western Gulf Advisory (WGA) will arrive in time - if at all - to satisfy creditors.

Sydney developer Keith Johnson, who paid up front fees of over $4 million to WGA for a loan that never eventuated, told the Sydney Morning Herald today he thought the Swiss-based lender was a fraud.

Efforts by Mr Serepisos over the weekend focused on "Plan B": trying to negotiate a bridging loan from another financier and a repayment schedule with creditors.

The five companies have assets ranging from apartment and commercial buildings to a professional football team.

Century City Football, owing a combined $1,862,469, owns the Wellington Phoenix A-League football team. Century City Developers (owing $539,626) owns 35 titles, mostly for apartments, at 332 Lambton Quay in central Wellington.

Century City Hunter Street ($804,061) and Century City Investments ($401,973) have leasehold title on two office towers at 2 Hunter St and 95 Customhouse Quay with a combined rateable valuation of $63.9 million. ANZ and ASB hold first mortgages over the properties, with Allied Farmers and Marac holding second-tier security.

The final company, Century City Management, owes the IRD $401,973.

Mr Serepisos also faces bankruptcy proceedings today brought by FM Custodians, acting for Canterbury Mortgage Trust, over court judgments requiring the developer pay more than $6.8 million.

Terry Serepisos' main defence this morning was an affadivit, signed by himself, claiming a $US100 million loan, understood to be from Western Gulf Advisory, would soon arrive to satisfy creditors.

The IRD, owed $3.6 million, revealed it had made enquries of WGA as to the company's intention and ability to deliver Mr Serepisos' loan – and the questions had gone unanswered.

Although Mr Toebes requested the affidavit be sealed, Associate Judge Gendall read parts out in open court. Mr Serepisos said in his filing a $US100 million loan "has been obtained and loan, security and guarantee documnents signed. It is a question of timing when these funds are made available."

Mr Toebes also said a "back-stop" plan was to offer up as security several properties to satisfy creditors if the loan did not arrive.

Rocky Meng, acting for the IRD, said the offered properties were insufficient to cover the amounts owed, and inquiries had been made of WGA as to its intention or ability to deliver Mr Serepisos' loan.

The IRD opposed the six-week adjournment.

"The commissioner does not yet have the confidence this will come through to rescue the group. News – in terms of the operation of the lender in Australia is not promising," Mr Meng said.

Mr Meng confirmed outside court he was aware of NBR's reporting.

Mr Toebes said the WGA funding could arrive at the end of this week: "A funding arrangment is signed. The earliest the preconditions can be satisfied will be this Friday."

Associate Judge Gendall gave his opinion on whether he though this outcome was likely when he called for a brief, three-day adjornment and noting information provided by Mr Toebes arguing against liquidation was scant:  "The only information before me today is the signed affadvit of Mr Serepisos, signed this morning. I take the view that this matter cannot be allowed to drift," he said.

"I note in passing this is at least the fourth call."

ACC was granted leave by the court to join as plantiffs on Thursday's hearing.