11 Jul 2008

Five Mile receivers appear at hearing

4:03 pm on 11 July 2008

Receivers appointed to the $2 billion Five Mile Township development in Queenstown have been given more time to present evidence to a council hearing.

The Queenstown Lakes District Council hearing, to discuss a district plan change for the development, was adjourned on Friday morning.

A lawyer acting for the receivers presented a letter to commissioners saying receivers intend to present evidence next week, and were granted an adjournment to do so.

The lawyer told the hearings no other evidence, from any other party, can now be given on behalf of Five Mile.

Chairman of Commissioners John Matthews accepted that position. He said the adjournment would also allow time for Five Mile developer Dave Henderson to apply for a High Court injunction, if he wished.

The hearing will resume on Tuesday.

Hanover Finance instructed the security trustee on Thursday to appoint Deloittes as a receiver, after Five Mile Holdings defaulted on a repayment on its $70 million loan two months ago.

Radio New Zealand understands Auckland developer Nigel McKenna has been appointed as agent to take over the development.

Developer Dave Henderson told Morning Report on Friday that Hanover Finance cannot put the company into receivership, because it recently sold the loan for the project on 30 June to a company associated with an Australian finance company.

Work began on Five Mile in 2007 and it currently consists of a large excavated carpark - touted by Mr Henderson as the largest such hole for a commercial development in the southern hemisphere.

Last month work stopped on the project, and Hanover Finance called in the receiver after a crane hire company said it was owed a significant six figure sum and filed for the liquidation of Five Mile Holdings Limited.

The implications for Mr Henderson's holdings are unclear, but other creditors claim there are many cross guarantees, including a hotel, apartments and commercial properties.