UPDATED- McKenna makes derisory last-ditch attempt to avoid bankruptcy
Embattled property developer Nigel McKenna will find out tomorrow morning if his last-minute creditors proposal will get off the ground.
Embattled property developer Nigel McKenna will find out tomorrow morning if his last-minute creditors proposal will get off the ground.
UPDATED 3pm: Fletcher Construction's bankruptcy bid against Nigel McKenna has been adjourned until tomorrow morning while Allied Farmers decides whether to accept the property developer's last-minute creditors proposal.
Earlier today in the High Court at Auckland the court heard that Mr McKenna owed a disputed debt to Allied Farmers of $110 million, which was not included in his proposal.
Fletcher's lawyer Graeme Christie said this afternoon that Mr McKenna now accepts there was an advance of $21.2 million made to him by Hanover (taken over by Allied) that is not in dispute.
The loan has been in default since May 2009 with no payments made, meaning that with penalty interest the debt on that loan alone is now over $45 million, he said.
Mr Christie said this amount alone would likely be enough to prevent Mr McKenna reaching the 75% support required from his creditors for the proposal to go before the court for approval.
He said advances of between $50 million and $60 million made to Mr McKenna by Hanover have now ballooned to $110 million thanks to Hanover's "favourable finance rates."
Allied would make its decision on whether to accept the proposal by tomorrow at 10am, Mr Christie said.
Mr McKenna's lawyer Brian Keene QC warned against the court making a rush to judgment, saying Mr McKenna's empire of companies exceeds 80.
He said there is a "prompt meeting date" for the proposal (scheduled for April 8) and said it will stand or fall at that meeting.
Associate Judge Tony Christiansen agreed to a hearing at 10am but warned his schedule is "chocka" and "I have only about 10 minutes available at that time."
Embattled property developer Nigel McKenna has made a last-ditch creditors proposal as he fights a bankruptcy application by Fletcher Construction.
Fletcher, which is owed about $800,000 from the constuction of the Holiday Inn in Wellington, began the bankruptcy proceedings back in November 2009.
In the High Court at Auckland today, Associate Judge Tony Christiansen heard that Mr McKenna had made a proposal that would pay one cent in the dollar to creditors over 36 months.
Mr McKenna has engaged insolvency practitioner Jeffrey Meltzer to handle the application.
Simpson Grierson partner Graeme Christie, representing Fletcher, said he received email notice of the proposal at 9.20am today.
He said the proposal excluded a dipsuted debt of $110 million to Allied Farmers, which if included would drop the proposed payout to about half a cent in the dollar.
"I'd love to come in to court and have all my debts wiped for half a cent in the dollar."
Associate Judge Christiansen has adjourned the hearing until 2.15pm.