Serepisos lawyer quits, bid to throw out bankruptcy dismissed

Terry Serepisos Photo / Greg Bowker

Property developer and Wellington Phoenix owner Terry Serepisos faces a bid to bankrupt him and two of his companies after the High Court dismissed an application to throw out the proceedings.

Associate Judge David Gendall dismissed the applications to set the bankruptcy notices aside in the High Court in Wellington today, and granted FM Custodians leave to apply for increased costs.

"The bankruptcy notices issued in respect to the debts, in my view, were properly issued and must remain," Associate Judge Gendall said.

In a surprise move, counsel for Serepisos, Justin Toebes, sought and was granted the court's leave to withdraw from the case.

Toebes told Associate Judge David Gendall that he had informed his client of the move.

Serepisos didn't appear himself, nor did he have alternative representation.

Toebes told the court Serepisos appeared to have accepted his advice that without any representation the application would likely be dismissed.

Associate Judge Gendall rejected Serepisos' argument that the bankruptcy application was unjust, saying there was no substance in the argument.

The decision lets FM Custodians, which is acting for the Canterbury Mortgage Trust, push ahead with bankruptcy notices against Serepisos, and his companies New Millennium Design Ltd. and Century City Developments.

FM Custodians is trying to claw back the remaining $5 million owed on some $6.8 million of loans personally guaranteed by Serepisos. The outstanding balance is accruing annual interest of 17.25 per cent.

The lender has already forced mortgagee sales on several properties and expects there may be a shortfall in excess of $2.3 million, Associate Judge Gendall said.

FM Custodians has 10 working days to lodge a memorandum for revised costs, and Serepisos will have a further 10 working days to reply.

- BusinessDesk / NZPA