Serepisos wants to work with insolvency specialists, court told

Wellington property developer Terry Serepisos has had bankruptcy proceedings against him adjourned so he can organise the sell-down of over $230 million worth of property.

John Billington, Mr Serepisos' new lawyer, told the Wellington High Court today that his client wants to work with insolvency specialists to sell his property portfolio, which includes about 150 residential properties and six significant commercial properties, all in Wellington.

Mr Serepisos has debts of just over $203 million to 27 secured creditors so sales at valued prices would leave a surplus for him of about $30 million.

The bankrupcy proceedings against Mr Serepisos were originally brought by FM Custodians but were taken over by South Canterbury Finance (SCF) two weeks ago. SCF has claimed debts of $18 million from Mr Serepisos.

Associate Judge John Gendall adjourned the case until September 26 to enable the creditors and Mr Serepisos to meet to try and find a way forward.

He also ruled that the court file not be searched by anyone, unless they had the prior approval of himself, Mr Billington and any other lawyer for one of the creditors.

In making that ruling, Associate Judge Gendall said his reason for doing so was so a third party could not get access to information that could help them unfairly buy property at a cut-down price.

The court heard one lender, owed $97 million, accounted for almost half of Mr Serepisos' declared debt.

The National Business Review understands this lender is Bank of Scotland International.

Empire shrinking
Mr Serepisos’ property empire has steadily shrunk in the last few months as lenders press for repayments.

In May two of his companies, Maison Property Holdings and 79 Manners Street, were placed into receivership by lender Equitable Mortgages. The frozen mortgage lender was owned nearly $13 million.

Two weeks ago the High Court in Wellington heard Equitable had joined bankruptcy action as a supporting creditor after the main asset held by the two companies - the Ivivi Building - had sold for $4.3 million. The building had a rateable value of $6 million.

Receiver John Fisk of PWC says, given the market conditions, "we were pretty pleased with the price.”

In late May finance company Mr Serepisos’ Todd Building on Wellington’s waterfront was seized by lenders. Marac had advanced a second mortgage over the building, but subsequently transferred the loan to “bad bank” Real Estate Credit Limited.

More recently RECL moved to force mortgagee sales for 17 apartments and 25 carparks owned by Mr Serepisos.

Real estate assets that look likely to be sold following today’s court hearing include the waterfront ASB Building, and Petone’s IBM Building.