By ANNE GIBSON Property editor
An insolvent Auckland apartment developer is trying to stave off bankruptcy proceedings after running up debts of $44 million.
Mark Bryers, who was to turn the MLC Building in Queen St into apartments, has proposed a debt compromise with creditors which could see them get as little as 0.3c for every dollar owed.
They will decide whether to support the plan at an Auckland meeting on March 16.
However, many have already filed individual bankruptcy petitions.
The $44 million debt is a result of the collapse of a string of companies including Auckland City Apartments, which is in receivership, Kennerley Holdings, which is in liquidation and Riviera Properties.
Documents lodged by Mr Bryers' lawyer in the High Court at Auckland show that he owes the money to 75 creditors, including various banks, suppliers and family trusts, although it notes that their "total estimated net exposure" is only $16 million.
This is because various property assets are being used as security to help reduce the debt and because Mr Bryers had loan facilities and guarantees, listed as debts, which he did not use.
Mr Bryers told the Business Herald that he owed far less than the documents stated and said his lawyers would soon file papers to prove this. He said in the next three weeks, documents from his lawyer would have "a substantial effect" on what had already been filed.
"What may appear to be a shortfall of $16 million - is that in fact the shortfall? The answer is, no it is not."
Mr Bryers claimed to have his creditors' support for his scheme of arrangement, except for one creditor, Harts Group (formerly Harts Reeves Moses) over a sum of $2.75 million.
In the meantime, he was trying to hold off being declared a bankrupt by proposing a special arrangement.
Using Section 15 of the Insolvency Act, Mr Bryers would propose a deal to creditors which, he said, would give them a better result than if he was declared bankrupt.
Parnell accountant Geoff Hamilton is the proposed trustee for the debt compromise.
He wrote in a December letter on the court file that the Section 15 compromise was approved by at least 50 per cent of the creditors, owed 75 per cent of the money.
The list of 75 creditors includes some of Mr Bryers' own companies, either in receivership or liquidation.
It lists HIH Insurance as the largest creditor, owed $12.8 million, although it says the "total net exposure" of HIH is nil.
The second-biggest creditor is Christchurch-based NZ Homebonds owed $7.3 million, HSBC (formerly HongKong Shanghai Bank) owed $4.4 million and National Bank owed $137,000.
NZ Homebonds' executive director Peter Rudkin said HIH Insurance was underwriter for NZ Homebonds. Although HIH was listed as being owed $12.8 million, HIH was not "owed one cent" by Mr Bryers.
"HIH Insurance entered into a loan offer but that loan was not drawn down."
Although NZ Homebonds was listed as being owed $7.3 million, its exposure was "much less," Mr Rudkin said.
But he refused to state the exact amount. Its net exposure in the High Court documents was pegged at $6.4 million.
One creditor - Hills Flooring, which laid $25,000 of carpet in Mr Bryers' Remuera house - has called for Commerce Minister Paul Swain to become involved, saying, "That such a staggering sum can be lost by anyone is unbelievable."
Hills credit manager Mike Mahoney wrote to Mr Swain about Mr Bryers.
He said Hills would go ahead with a High Court application against Mr Bryers on Wednesday.
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Developer left owing $44m as firms collapse
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