Auckland property developer Brent Clode is suing failed financier Bridgecorp for $15 million after deals to loan money for Auckland residential developments turned sour.
Bridgecorp has denied the claim, disputed the matter and lodged a claim against Clode.
Bridgecorp's receiver Colin McCloy of PricewaterhouseCoopers said he could notrelease any details about the loans or the dispute, or provide documents.
Clode said yesterday the initial amount he had sought from Bridgecorp was $11 million. But with 11 per cent annual interest and costs, that had risen to more than $15 million.
"The money is basically an overpayment and came about due to Bridgecorp overstating the money owed to them under the various mortgages. We had no choice but to settle the debt - which we did - and then sue for the money back," Clode said. He said he was forced to repay the money because he faced having Bridgecorp calling in mortgages and selling properties he had developed.
But he said the money had now vanished and he feared he would not be repaid.
"Prior to the settlement, we put Bridgecorp on notice that the money was in dispute and should be held in trust from an accounting point of view. It should be held as a contingent liability on the balance sheet," he said.
But the money was not held in trust and paid out as a dividend, he claimed.
The matter is set down for a hearing in the High Court at Auckland on November 20. Clode's companies Guardian Property Management, Clode Investments and Whitney Park are suing three entities - Bridgecorp Finance, Bridgecorp Investments and Bridgecorp - for the money.
Clode's companies borrowed money for a 48-unit townhouse development at Albany, a 42-unit residential development at Blockhouse Bay and to develop other residential properties.
Clode said money was borrowed from Bridgecorp to develop about 120 houses.
The Herald reported yesterday on one aspect of the case: Bridgecorp seeking that Clode provide security of costs if Clode lost the case.
Clode said yesterday he had negotiated a $30,000 payment for costs, which will be held by the High Court.
