Former yachting millionaire Stewart Thwaites was declared bankrupt in the High Court in Wellington today.
Last October the High Court ordered Thwaites to pay finance company Commercial Receivables - wholly owned by the troubled Hanover whose shareholders are Eric Watson and Mark Hotchin - $3.2 million, plus accruing 22 percent interest.
The debt arose from guarantees Thwaites and his family trust gave to cover debts of Starlight Yachting, which was placed in liquidation last year.
Money lent in a revolving credit agreement to Starlight was secured by a mortgage over the super maxi racing yacht Zana, also known as Konica Minolta, which cost $7 million to build.
After Starlight failed to pay two monthly instalments on its loan, the yacht was repossessed in Valencia, Spain, the October court judgment said.
Commercial Receivables told the court then that between September 2006 and April last year it spent $760,823 repossessing, moving, repairing, insuring, marketing, maintaining and berthing the yacht, which was moved to a marina in southern England.
Thwaites and the family trust claimed Commercial Receivables should have accepted an offer of A$1.1 million made in November 2006, which would have substantially repaid the debt then owing.
They also said the yacht had not been marketed appropriately or properly maintained after it was repossessed, but the court rejected those arguments.
Justice Warwick Gendall was told today the yacht had been sold for US$300,000 ($580,832.52) and Commercial Properties was still seeking the rest of the money it was owed from Thwaites.
There was no opposition to Justice Gendall declaring Thwaites bankrupt.
In August 2007, one-time millionaire property developer and bar owner Thwaites was sentenced to 400 hours' community work for tax evasion, and found $1.4 million to pay employees' tax deductions which had not been passed on to Inland Revenue.
