Henderson pleads for more time

David Henderson. Photo / Martin Sykes

David Henderson, the one-time rich-lister and Princes Wharf developer, is fighting bankruptcy and yesterday met creditors to plead for more time.

Henderson was one of Auckland's most influential developers, credited with projects worth about $1 billion but now many of his companies are in liquidation.

Yesterday, he was at the Northern Club in central Auckland, seeking unsecured creditors' patience until he could find money.

He said after the creditors' meeting he was "honest, a fighter" and would not give in. Creditors were claiming $166 million in personal guarantees, he said.

"I'm not going to run and hide in a corner. I will reinvent myself in some other way. I'm not a person that takes my bat and ball and disappears. If the city doesn't have developers like me who take risks, you don't have a progressive city," he said.

Daniel Grove, Henderson's barrister, said the amount claimed was "a moving picture".

But Inland Revenue wants $3,659,181.53 plus costs and disbursements of $27,378.

Henderson said that was for a Princes Wharf leasing deal, "not for GST or PAYE".

"It's for guarantees that I signed in relation to the different layers of leasing on Princes Wharf. IRD thought it was a taxable activity. We did the business deal and paid quite a lot but due to the economic situation, we could not afford to pay any more," Henderson said.

His Kitchener Group was once a huge force, putting up the six white wharf buildings including Hilton Auckland, the Overseas Passenger Terminal, hundreds of apartments, upmarket restaurants, shops and carparking.

Now, the courts have ruled Henderson has "negligible assets" and anything he owns is burdened by so much debt that creditors stand to get little.

Henderson built the towering Precinct Apartments near Albert Park and planned a huge revamp of Victoria Park Market but that never eventuated, leaving some stall-holders disgruntled.

Groups of creditors gathered yesterday at Princes St to hear Henderson's explanations.

Marc Lindale, an executive director of the failed Strategic Finance, was one of the businessmen who filed into the Northern Club to discuss money behind the ivy-covered walls. Strategic and Kitchener's fortunes have been closely linked. Strategic had its Auckland base in Shed 22 until PricewaterhouseCoopers were appointed receivers this month.

Strategic associates, including parties connected to Lindale and associate Brian Fitzgerald, have extensive wharf interests and manage the six-building waterfront complex.

Grove evicted the Herald from the Northern Club's Logan Campbell Room where the meeting was held and refused to provide documents outlining how much creditors were claiming. Copies had been sent to creditors, he said, and were unavailable to the public.

Grove is known for his work with Paul Dale in assisting victims of the Blue Chip collapse. Henderson arrived just after 10am when most creditors were seated. Grove said afterwards that the meeting had been adjourned for a month. Creditors did not vote on Henderson's debt proposal, he said.

Last year, the IRD filed action against Henderson in the High Court at Auckland, the commissioner seeking to have him judged bankrupt. Henderson opposed that via Grove.

Last month Judge David Abbott delivered an oral decision on the debt, saying Henderson planned to put a proposal to his creditors under the Insolvency Act to give himself time.

"If that proposal is successful, it would have the automatic effect of compromising the commissioner's claim," the judge said.

IRD's patience had run out and Henderson did not dispute the $3.7 million tax debt, he said.

On February 9, Grove argued for time because the debt scheme was about to go to creditors and everyone - including the IRD - would be better off agreeing to those terms rather than having him declared bankrupt.

The judge commented on Henderson's financial situation.

"Mr Henderson himself has negligible assets. Interests with which Mr Henderson is associated (companies and trusts) own substantial assets but the assets owned by the trusts appear to be fully encumbered and there appears to be no equity in the companies in which he is a shareholder. All the companies' assets appear to be fully charged. The largest of Mr Henderson's debts have arisen as a consequence of personal guarantees," the judge said.

But he gave Henderson more time, ruling in favour of an adjournment as long as he filed his debt proposal within 10 days. The judge said he needed to balance IRD's interests against those of other creditors.

"There is little prospect of his unsecured creditors receiving anything if I was to allow the commissioner to proceed with its application today and make an order adjudicating Mr Henderson bankrupt," the judge said, making an award for costs in favour of the IRD.

Victoria Park Market is one of Henderson's few hopes because one of his companies plans to manage its development and that contract would generate $2 million over three years, the judge said. Henderson would be paid a "modest salary" but $1.5 million would be available for creditors.