Developer and Hanover finally settle

Andrew Krukziener's agreement with Hanover means he will avoid bankruptcy.

After two years, four judicial decisions and numerous court hearings, property developer Andrew Krukziener and Hanover Finance have finally settled their differences.

Former Rich Lister Krukziener will not be bankrupted over the $6.98 million the court ruled he owed Hanover. In return, he will not pursue the finance company for the $86,000 he claimed it owed him on top of the $4.15 million loan at the core of the dispute.

But the amount that has finally changed hands may never be known, with Hanover saying the deal is confidential and refusing further comment.

The protracted battle stems from a loan originally made in 1998.

In 2002, Hanover - then called Elders Finance - struck a deal with Krukziener when his companies could not meet their commitments.

The financier went into a joint venture with Krukziener over properties at 13-15 and 17 Albert St in central Auckland. The plan was the finance company would get payment from a share of the profits from a development planned for 13-15 Albert St and by receiving surplus income from the next-door building. The outstanding loan, plus interest and any fees, would have to be paid if the Krukziener camp defaulted on anything.

In 2005, the rates on 17 Albert St were behind and Hanover called in the loan. Hanover got a High Court summary judgment in April 2007 ordering Krukziener to pay it $4.15 million.

Krukziener went to the Court of Appeal, claiming he and former Hanover chief executive Kerry Finnigan had an arrangement that the loan would not be called up until six months after the joint venture was completed.

But the Appeal Court ruled that this was contradicted by the loan agreement, which Krukziener signed. By this time, it was June 2008.

Hanover restarted bankruptcy proceedings. Krukziener appealed against the proceedings but the High Court dismissed this in August, saying it was not convinced the developer had a counter-claim equal to or in excess of the $4.15 million.

In November, Krukziener sought a stay of proceedings while he appealed against the August decision. Meanwhile, he had begun separate action to recover what he said Hanover owed him.

Last month, Justice Patricia Courtney ruled that 18 per cent monthly compounding interest was due on the $4.15 million, bringing Krukziener's debt to $6.9 million.

In 2001, one of Krukziener's companies defaulted on $21 million in bond payments due to investors in the Metropolis hotel and apartment development in Auckland's High St.

Hanover, owned by Eric Watson and Mark Hotchin, avoided receivership in December by getting investors to agree to a five-year rescue plan. It aims to repay 16,400 secured deposit investors principal of over $550 million within the period.

LONG BATTLE

APRIL 2007 High Court awards summary judgment for $4.15 million in favour of Hanover.

JUNE 2008 Appeal Court dismisses Andrew Krukziener's appeal against summary judgment.

AUGUST 2008 High Court dismisses Krukziener's appeal against bankruptcy proceedings.

FEBRUARY 2009 High Court rules interest due on debt, bringing it to $6.9 million.

MARCH 2009 Hanover and Krukziener settle.