Developer loses bid to avoid bankruptcy

David Henderson had been forced to put his $10 million penthouse suite on the market but had no takers. Picture / APN

Princes Wharf developer David Henderson is the latest in a string of high-profile Aucklanders to be bankrupted by Inland Revenue.

Henderson was bankrupted late on Thursday afternoon after a request to delay the IRD's application to bankrupt him was rejected.

Henderson owes the IRD $3.7 million. The commissioner has been trying to bankrupt him for 18 months.

The former NBR Rich-Lister developed Princes Wharf and other projects including the high-rise Precinct Apartments near Albert Park.

He was also involved in the multi-million-dollar redevelopment of Victoria Market.

Henderson tried to avert bankruptcy by getting the majority of his creditors to agree to a proposal to drip-feed $1.5 million, or 2.5c in the dollar, on a $130 million debt over three years.

The proposal needed court approval but this was denied because he had not complied with all the necessary statutory requirements.

High Court Associate Judge David Abbott said the "critical aspect" of this case was the fact Henderson had already had one opportunity to seek approval for a creditors' proposal.

"His first application was dismissed because he had not complied with statutory requirements that are a prerequisite to the giving of approval. There are yet further issues on the second application as to whether the statutory threshold for creditor acceptances has been met.

"However, Henderson has already been given that opportunity by the court, has failed to take advantage of it, and is now seeking yet further indulgence. In that context, and in circumstances where there is doubt as to whether the statutory threshold for creditor acceptances has in fact been met, public interest considerations must receive greater weight."

During a hearing to determine whether Henderson's proposal would be accepted, it was revealed he had paid only $17,000 in tax over a 16-year period - less than someone on a minimum wage would pay.

Henderson's lawyer Daniel Grove said the debt had been reduced from $166 million to about $128 million, primarily through the repayment of $28 million to Westpac. He still owes the Bank of Western Australia $33 million and Downers $4 million.

Judge Abbott gave several reasons why another adjournment was not possible, including the size of his debt, the modest dividend to participating creditors under the proposal, and the wish of a substantial body of creditors to have the Official Assignee investigate his affairs.