Superyacht builder's creditors face two-month wait

Creditors of superyacht builder Ivan Erceg will have to wait at least two more months to find out whether he will be bankrupted.

The owner of failed Sensation Yachts avoided a bankruptcy order yesterday when Associate High Court Judge Jeremy Doogue put off an application from Cayman Islands-registered company Balenia Ltd.

Erceg owes Balenia US$21.5 million ($29.3 million) over three superyachts Sensation was supposed to finish.

Sensation had agreed to design and build five luxury vessels for Balenia, delivering the first yacht by April 2005 and the last by May 2007.

Balenia had been paying in instalments but various disputes arose, and by September 2007 only three yachts were partially built.

The company eventually reached an agreement with Erceg that he would buy the three unfinished boats for US$21.5 million, paying a US$2.1 million deposit.

The deposit was not paid and in September last year Balenia gained a High Court judgment against Erceg. Early this year Erceg appealed and lost. The funds remain outstanding.

Erceg's lawyer Philip Revell told the court his client had now applied for a summary judgment against Balenia. That was due to be heard on November 26 and it made sense for any bankruptcy fixtures to be held after that. But Balenia's lawyer, Graham Kohler, described the move as "an 11.59pm application" designed to drag out proceedings.

Erceg had chosen not to pay Balenia, and had not applied to set aside the bankruptcy application or gain a stay of proceedings, he said.

"He has steadfastly refused to comply with a court order that has been outstanding for over a year."

Balenia is not the only creditor seeking a bankruptcy judgment against Erceg. The court is due to hear Hong Kong and Shanghai Banking Corporation's application over a debt of $6.4 million on November 23.

Finance company Dorchester Finance, owed $4.5 million, was also represented in court yesterday as a creditor in support.

Kohler had sought to have the Balenia matter heard alongside HSBC's on November 23. But Associate Judge Doogue said he had concerns about squeezing the two in together and directed that a separate date be set for Balenia's application.

Henderson-based Sensation Yachts went into liquidation on July 31 and then into receivership a week later.

The liquidators estimate it owes $40 million. They say Erceg has told them the company has no remaining assets.

Erceg now lives in Europe.