Hartners offer deal on debts

By ANNE GIBSON property editor

Property tycoon Wayne Hartner and his wife, Gaile, are promising to sell their BMW, jewellery, furniture and marina berth in a bid to stave off bankruptcy.

However, the deal is unlikely to save the couple's yet-to-be-completed luxury home in Epsom.

While creditors of Hartner Construction - owed a provisional $28.5 million - have been told by receiver John Waller they are likely to get nothing, the couple is proposing to pay at least some of its debts to firms which supplied materials for their $3.5 million home.

The car, jewels, furniture and berth are estimated to be worth $250,000, which would cover less than a third of the $770,000 personally owed by the couple and subject to personal guarantees.

In letters sent out late last week, creditors have been told they will get only 5c for every dollar owed if the deal is not accepted and the couple are bankrupted.

According to the Hartners' lawyer, Keith Young of Jones Young, $680,000 of the total owed is for work and materials on the Golf Rd house.

But creditors are taking matters into their own hands, with two Auckland District Court judgments issued against the Hartners last week.

The court has ruled Wayne and Gaile Hartner must pay $33,000 to Modus Lighting at St Lukes for indoor and outdoor lights installed at the house. Modus was contracted to the W F and G A Hartner Trust.

It has also ruled Gaile Hartner must pay $31,000 to the Tile Warehouse at Penrose, for work and materials supplied for bathrooms at the Hilton Hotel, at Princes Wharf.

Although the hotel was being built by Hartner Construction, Mrs Hartner's personal guarantee allowed the Tile Warehouse to seek the judgment, giving her about a month to pay the debt before she is declared bankrupt.

According to the letter sent out by Mr Young last week, the National Bank, which is owed $8.5 million after the collapse of Hartner Construction, has indicated it would be prepared to consider waiving any claim to the car and marina berth.

The 1999 silver BMW is for sale at $155,000. The Westhaven marina berth, where Mr Hartner's luxury launch Risk & Reward was berthed before it went to Florida, is said to be worth $245,000 and is also for sale.

"The Part 15 [of the Insolvency Act] proposal would avoid bankruptcy for Wayne and Gaile and the only reason we will do that is we have managed to persuade the National Bank - in return for the Hartners' co-operation - that they will agree not to pursue a claim for those two assets," Mr Young said.

For the deal to go ahead, half the creditors, who are owed three-quarters of the debt, have to agree. According to Mr Young, 90 per cent have indicated they will accept the deal.

A meeting of creditors would be held this month to vote on the arrangement, he said.

Mr Young said the Epsom house would be sold at the National Bank's behest, but this would not happen until landscaping, carpeting, fencing and other work had been completed.

"Unfortunately there is no huge stash of assets and they won't be retiring to the south of France. They will be skint when this is over."

At the time Hartner Construction went into receivership, Mr Hartner said he stood to lose it all and he, like the subcontractors owed money, would be out working in the industry once again.