Hartners' trusts at mercy of bank

By ANNE GIBSON

The luxury Epsom house, the sleek white cruising boat, thoroughbred interests, the office buildings, even the corporate box at Eden Park - Wayne and Gaile Hartner will lose it all, the receiver says.

Taking issue with a prominent article in the Business Herald (April 4 "Hopes fade for Hartner cash"), receiver John Waller of PricewaterhouseCoopers said Mr Hartner would not emerge with wealth.

Although the family trusts established by Mr Hartner and his wife, Gaile, are outside the scope of the receivership, Mr Waller said that assets in those trusts were certainly not out of the reach of the National Bank, in whose interests he is acting.

The bank was the first debenture holder and had charges or pledges over the assets in all those trusts, Mr Waller said.

However, other creditors of Hartner Construction and Hartner Group are not being promised a cent. Subcontractors and suppliers owed an estimated $28.5 million do not stand to benefit from the sale of personal assets.

The Hartners' lawyer, Keith Jones of Jones Young, said the notion that the Hartners had substantial assets protected from all their creditors was incorrect.

Mr Jones said Mr Hartner had been distressed by the publication of the article on April 4. "That article caused him a lot of pain," said Mr Jones. "We had advised him at the time that it was best to keep his head down and try and get this thing together so that at least we could go back to creditors with a firm proposal.

"As far as I'm aware, absolutely everything that Wayne and Gaile have in trusts and in their name personally is up for sale by the receiver," he said.

Assets being sold included a $155,000 BMW 750, jewellery and furniture worth $20,000, the $230,000 marina berth at Westhaven, the $5.5 million boat, the lease on the corporate box at Eden Park and the $3.5 million house in Epsom.

Mr Waller said commercial buildings such as the Viaduct Carpark in Fanshawe St and Apex House - a gutted office building in the Viaduct Basin - would also be sold.

In a letter sent to creditors owed $770,000, mainly for building the Hartners' Epsom house, Mr Jones wrote: "The banks have recourse to all of Wayne and Gaile's assets, including assets held in their various trusts."

Mr Waller's first report to creditors, dated March 23, also stated: "The wider Hartner family group has ownership interest in a number of other entities most of which are no longer trading or have no assets.

"We are assessing and monitoring actions to realise remaining assets, which in most instances are subject to secured borrowings or cross guarantees."

Mr Jones said Mr Hartner's yacht, Risk & Reward, was worth about $5.5 million. But Strategic Capital (formerly Salisbury Group), which had loaned $2.75 million for it, was first debenture holder.

An offer of $US2 million had been received for the boat. National Bank was second debenture holder for money it had advanced to buy the boat.

Mr Jones said the National Bank had extended a $900,000 facility for the Epsom house.

Mr Waller revealed details of disputes which Hartner Construction is involved in with various developers. All up, Hartner Construction is seeking $13.2 million from disputed claims.

The four biggest claims are against:

* David Henderson's Kitchener Group for work on Princes Wharf, where former Hartner Construction general manager Peter Kay said in late January that the firm was owed $3.5 million for work building the apartment blocks or sheds 19, 22 and 23.

* Greg Wilkinson's Plaza Developments for work on the Watermark (now the Sebel Suites of Auckland) in the Viaduct Basin, where Wayne Hartner said in February that $3.6 million was owed.

* L & Y Holdings for the Broadway Mall building on Broadway in Newmarket, the subject of a previously unknown dispute, where the amount is not available.

* Parklands Apartments over a $1 million-plus dispute for work done on a building which is now the Duxton Hotel ( previously the Park Regency) at 100 Greys Ave. Mr Waller said all these disputes were at various stages of proceedings and subject to counter-claims, but were being pursued with some vigour.

Meanwhile, a former Hartner employee has voiced his support for Mr Hartner and objected to media coverage.

Evan Geeves, who is now working on the North Shore Hospital site for Carson Group, was construction manager for Hartner Construction in Auckland, responsible for projects from April last year until Hartner Construction went into receivership on February 1.

Mr Geeves objected to a photo of Mr Hartner "in happy mode, clearly meant to contrast with the headline proclaiming misery for his subcontractors and other debtors."

"The intent is obviously to imply that he's okay and doesn't care about anyone else.

"The reality is that nothing could be further from the truth ... Whatever his business failings, he is an honourable and honest man."