Serepisos faces bankruptcy proceedings

Embattled Wellington property developer and Wellington Phoenix owner Terry Serepisos will be back in court early next week. Photo / supplied

Embattled Wellington property developer and Wellington Phoenix owner Terry Serepisos is facing a bankruptcy proceeding on Monday morning.

FM Custodians, which is acting for the frozen Canterbury Mortgage Trust, has filed an application in the High Court in Wellington, a court spokesperson said. Serepisos is due to appear in the bankruptcy notices on July 18, the spokesperson said.

The proceeding comes almost two months after Associate Judge David Gendall dismissed applications to set aside FM Custodians' bankruptcy notices.

The May 23 decision let FM Custodians push ahead with bankruptcy proceedings against Serepisos and his companies New Millennium Design Ltd. and Century City Developments Ltd.

In the same hearing, Serepisos' lawyer Justin Toebes, principal of JT Law and a former partner at Buddle Findlay, withdrew as the property developer's counsel.

Serepisos' Century City Hotel on Wellington's Tory Street changed hands last week after it was offered as security on a loan from rival developer Mark Dunajtschik, and he has put the property up for sale.

FM Custodians is trying to claw back the remaining $5 million owed on some $6.8 million of loans personally guaranteed by Serepisos. The outstanding balance is accruing annual interest of 17.25%.

The lender has already forced mortgagee sales on several properties and expects there may be a shortfall in excess of $2.3 million, the May judgement said.