KEY POINTS:
Author Alan Duff has held off creditors owed more than $3 million for another two months while he tries to negotiate a book and film-rights deal in France.
An application to have the Hawke's Bay-based writer declared bankrupt was heard in the High Court at Napier today but
Justice David Gendall allowed him a final two-month adjournment so a repayment proposal could be put to a creditors' meeting on September 23.
Duff's lawyer Gerald McKay said the author was staying in the Loire Valley, at the home of a British merchant banker who was linked to British publisher Random House. He was being paid a daily living allowance as an advance from his publisher.
Justice Gendall said it would be understandable if Duff's 22 creditors felt aggrieved that they were receiving nothing while the author was living overseas.
But Mr McKay said Duff effectively had no assets - "nothing in the bank, no savings, nothing."
The author was in France, at the invitation of the French Government and his publisher, to have some of his books translated into French. He was trying to negotiate a book and film-rights deal which could provide "substantial" returns, enough to satisfy his creditors who are owed more than $3 million.
Today's application to have him declared bankrupt came from FM(crrct) Custodians Ltd and Mutual Finance, which lent Duff $300,000 for a Havelock North property two years ago.
Mutual Finance received $306,000 from the sale of Duff's $3 million Ian Athfield-designed home but claims it is still owed $36,000.
Another lawyer in the court today, Bill Calver, revealed that another creditor, Carswell Trust, had sought judgment for another $100,000 against Duff in the Hastings District Court today.
It had been aware of the insolvency proceedings but was not on the High Court's list of Duff's creditors and had not received the repayment proposal being offered to the other 22.
Mr McKay said he was unaware of the Carswell Trust application but said it was "no doubt one of those matters which will emerge in the course of inquiries into these matters".
It was taking some time to establish the full extent of Duff's creditors, not helped by the fact he was currently in France.
Duff's "popular track record" in the publishing field indicated that creditors had everything to gain by allowing him to try to secure the book and film-rights deal, rather than have him declared bankrupt, which could affect his ability to work.
When he previously appeared for Duff in July, Mr McKay estimated the extent of the author's debts to be between $200,000 and $300,000 but at the time had not been aware of a Hastings family trust and other creditors who had since emerged.
The T Ellis Trust had made substantial advances amounting to $2.3 million to Duff for property development, which was used for both land purchases and the ongoing development.
Duff had advanced money into other enterprises and Mr McKay said the creditors' meeting in September would want an explanation of those matters. Most of Duff's debts were unsecured advances or unpaid trade creditors.
While FM Custodians continued to oppose any further adjournment and the repayment proposal offered, others such as Toyota Finance were working with Duff and were prepared to wait, he said.
Questioned by Justice Gendall about Duff's current circumstances in France, Mr McKay said he was staying in a village "which is in the nature of a retreat".
He said it was not Duff's intention to leave creditors high and dry and his 18-month repayment proposal could be achieved in 12 months if negotiations were successful.
Asked if Duff was continuing in business and incurring more debt, Mr McKay said there was no indication of that, "except perhaps with his lawyer".
Justice Gendall said there would be a final adjournment until October 16 to allow the repayment proposal to be put to the creditors' meeting next month.
- NZPA
