Troubled Wellington property developer Terry Serepisos has been given a bit more time to convince creditors he can orchestrate an orderly sale of his assets with a surplus of some $30 million.
Associate Judge David Gendall granted an adjournment for bankruptcy proceedings against Serepisos in the High Court in Wellington today after receiving a proposal on Friday that will leave assets worth some $232.5 million in the hands of two experienced insolvency practitioners to sell them over the next few years.
Judge Gendall initially adjourned the hearing until September 12, though was convinced to extend that to September 26. Counsel for Serepisos, John Billington, initially asked for an adjournment until October 10.
That stay means Serepisos will have the opportunity to get his 27 creditors owed almost $204 million together and persuade them that an orderly sell down of his assets would be in their best interests.
"It is quite unclear to the court at this junction whether the proposal advanced by the judgement debtor could have reasonable prospects of success," Judge Gendall said.
Billington told the court the situation had reached a point where the property developer "can't deal with creditors on a piecemeal basis" and that it made sense for an orderly sell-down of the assets.
If creditors don't agree to the deal, there could be a flood of 150 residential properties and in excess of six commercial properties, primarily in Wellington, which could lead to a major depreciation in market values, Billington said.
If that happened, it would be an "economic and social catastrophe."
Creditors South Canterbury Finance Ltd. and Equitable Mortgages Ltd. didn't oppose the application.
SCF took over the bankruptcy application on August 18 after FM Custodians Ltd. withdrew its bid saying its debt had been settled.
Judge Gendall also granted an interim order until the next hearing date to prevent searching court documents without the judge's and counsels' approval.
Billington said that would prevent any third parties gaining access to commercially sensitive information ahead of the likely sale of assets.