Bankrupt property developer owes creditors millions

The plan was originally to build a series of terraced houses. Photo/Trade Me.

A housing development on Auckland's North Shore has left creditors millions of dollars out of pocket.

Chelsea View Estate Trust initially planned to build a series of terraced houses on the site, but the project has fallen into financial trouble.

According to the Companies Office, liquidators Rodgers Reidy were appointed to the company on May 3.

Stephen Robert Kelly, the sole director listed with Chelsea View Trust, was declared bankrupt late last year.

Liquidator Paul Vlasic told the Herald this was not the first time Kelly had been declared bankrupt.

Vlasic said it was still too early to go into specifics but that the financial trouble stemmed from a dispute with a builder.

Property Developer Stephen Kelly has been declared bankrupt before. Photo/File.

Vlasic confirmed that primary lender Natwest Finance was owed millions of dollars and that one contractor was owed $800,000.

Vlasic's attention is now focused on the mortgagee sale of the 8 Huka Rd property, which is currently listed on Trade Me.

Viewings of the property started yesterday afternoon and will run through to Tuesday May 22.

While the properties should recover some of the money owed, Vlasic said creditors would still be left out of pocket after the sale.

This latest financial trouble follows on from Kelly's prior business venutre, Volcanic Investments, which went into liquidation, following a string of failed property developments in upmarket Auckland suburbs.

His personal debts at the time amounted to more than $28m.

Thereafter, Kelly went on to start the Chelsea View Estate Trust, which has now gone into liquidation.

Kelly refused the Herald's request for comment.