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Finance company Hanover Finance said today it had instructed security trustee FMH Nominees to appoint a receiver to Queenstown Five Mile Holdings "as a result of un-remedied loan defaults".
However, high-profile developer Dave Henderson, who owns Five Mile, said he was planning to take out an injunction to prevent the receivership proceeding.
The Auckland-based finance company is thought to be owed around NZ$70 million by Dave Henderson's Property Ventures Ltd and has security over land near Queenstown's airport thought to be worth over NZ$100 million.
The Hanover loan to Henderson's company is the largest on its book.
Henderson, the subject of a feature film about his four-year battle with Inland Revenue over tax payments, said lender Hanover and secondary lenders, NZ Castle of the US and Auckland financier Martin Reesby, had all threatened the Five Mile project with receivership.
Henderson is also facing a liquidation application against Five Mile Holdings and its parent, Property Ventures. Christchurch crane-hire company Smith Crane and Construction applied in May for the liquidation to recover a "significant six-figure" amount,.
"It is in our view quite improper. We will be applying immediately for an injunction ... I am just going to meet with my lawyers now," he said.
Hanover said the defaults arose several months ago and Hanover had been working with the borrower to determine a suitable way forward.
"However, as a result of other third party creditors commencing legal action against Five Mile Holdings, and enforcement action against other Property Ventures Limited companies (the parent of Five Mile Holdings), Hanover Finance believes it is in the best interests of its investors and other stakeholders to exercise its rights as a secured creditor.
"Accordingly, a receiver has today been appointed to Five Mile Holdings so that the assets can be best managed for all interested parties and the loan repaid in due course."
Henderson said the injunction was improper because Reesby was appointed several months ago to act for Property Ventures.
The 5 Mile Development was supposed to house 10,000 people and include a shopping centre complex. The multi-stage project was expected to have costs hundreds of millions of dollars to build and be worth NZ$2 billion on completion. Activity has stopped at the site after a large hole was dug for an underground carpark for the shopping centre part of the development.
* Hanover Finance also said today it has sold the troubled Kinloch golf resort development project near Taupo for an undisclosed sum.
Hanover held a secured first mortgage over Kinloch, which included the golf course bearing the name of golfing legend Jack Nicklaus and multiple development sites on the 345 hectare property.
The domestic purchaser, also undisclosed, planned to continue to develop the property, Hanover said in a statement.
Hanover sought a mortgagee sale of the assets in May "in order to protect value in the assets for its investors".
The secondary backer for Kinloch was FE Investments, half owned by finance company First Eastern Finance.
Selling agent Colliers International said the property was worth $57.7 million and included was an 18-hole golf course and club house ($18 million), 68 residential sections ($535,000 each) and a lodge/hotel site, clubhouse and 50-unit villa complex ($3.5m).
In March last year, Nicklaus, the American winner of a record 18 majors known as the Golden Bear, came out to hit the first drive to open the Jack Nicklaus Signature Golf Course.
- NZPA /INTEREST.CO.NZ
