Is Hanover Going Under? Or is Henderson?

[captaincrab]

Hanover are toast.
Nice one CD, "allover" is about right.
Its so simple. With all these defaults and no sales occuring no money is coming in, so there is no money to repay investors debentures as they fall due.
Only an idiot would support Hanover now.
I bet moratorium within three months.
On Five Mile, if anyone can fix it, its Reesby working with McKenna.

[princess]

If there were no finance companies paying investors 9.5%, the mums and dads of the world would leave their money in Kiwibank earning 8.5% (seem a lot of risk for one measly percent eh).

Banks would be the place to go to for development finance. If a development is too risky for a bank, its too risky, full stop.

This is evidenced by the fact that so many "Developers" keep their own cash locked away in trusts, so that when their development goes under, its only other peoples money that gets lost.

Having said that, its other, greedy people who don't do their homework about where they put their money - they just see that extra measly 1%.

[captaincrab]

"evidenced by the fact"?

Wrong. Developers dont have cash, they have equity they use to raise debt.
Princess I realise you are an amateur but the vast majority of developments are financed by both mainstream Banks and what is called second tier lenders like Hanover. This has worked successfully for years and NZ is full of projects which have been very sucessfully done this way.
Too say if itstoo risky for a Bank its too risky full stop shows a lack of understanding and a lack of experience. Just b*** s*** in other words.

[TonyMacaroni]

Wrong. Developers dont have cash, they have equity they use to raise debt.
Princess I realise you are an amateur but the vast majority of developments are financed by both mainstream Banks and what is called second tier lenders like Hanover. This has worked successfully for years and NZ is full of projects which have been very sucessfully done this way.
Too say if itstoo risky for a Bank its too risky full stop shows a lack of understanding and a lack of experience. Just b*** s*** in other words.

I took from princess' statement that developers are able to protect their personal assets from litigation by appropriate entity structuring. We all do this, why would developers be any different?

Is there really a need to respond in such an unproductive manner?

[halfempty]

I took from princess' statement that developers are able to protect their personal assets from litigation by appropriate entity structuring. We all do this, why would developers be any different?

Is there really a need to respond in such an unproductive manner?

The crabster was crass and slightly harsh but ultimatly he's right in what he's saying.

Also what makes us all think that Dolf n Dave have loads of money?

They are famous that doesn't make them loaded?

[halfempty]

Mezz Funding
2001-2008
RIP

[princess]

Hey Cap'n - I'm happy to admit I'm an amatuer - thankfuly not as much as hanover's poor investors - but I think the expletives in your response are a little harsh.

PS maybe badger is right about paper money!!!

[Davo36]

Seems Dave Henderson has been booted off the project by Hanover:

http://www.nbr.co.nz/article/hanover-cuts-henderson-out-five-mile-32922

David

[muppet]

Developer and taxman battle over $7 million

Developer and taxman battle over $7 million
5:00AM Wednesday July 16, 2008
By Anne Gibson

Auckland developer David Henderson is being sued over a $7 million tax bill claimed on the sale of apartments in an upmarket high-rise apartment block.

A telephone conference was scheduled for yesterday at the High Court at Auckland between Precinct Apartments Ltd, represented by lawyer Anthony Johnson, and Henderson over Inland Revenue's claim for tax on apartments he sold.

Bernie Montgomerie, of Montgomerie and Associates, was liquidating the Henderson company. The Auckland-based developer is Precinct's sole shareholder and director.

The action comes well after the event: the Precinct block between the Whitcoulls corner and Albert Park was finished in 2006 and apartments were earlier sold off-plan to enable construction to start.

Montgomerie said the issue stemmed back to his appointment on August 2 as the company liquidator and he was now seeking to recover outstanding debts.

Henderson had appointed him liquidator, Montgomerie said, but he was obliged to work in the interests of the major creditor which was IRD, seeking the $7 million from Henderson for the goods and services tax owed on the sale of apartments.

In his analysis of the company, Montgomerie uncovered a number of other problems with the building's planning and development.

His first report showed how various problems were encountered during construction, including the loss of 11 apartments planned to be built there but barred due to various issues.

An error was made in the shading calculation based on the building's adverse effects on Albert Park, Montgomerie wrote.

Delays in construction were also caused, partly because of an additional $1.3 million in piling costs.

Then the site was found to be contaminated because it was once used as a petrol station.

"There have been ongoing neighbour disputes over matters including cross-contamination of the soil, structural damage, light and air easements and concern regarding alleged damage to adjacent owners' roofs," Montgomerie wrote.

The company had some assets in the form of retentions owed under sale and purchase agreements, he found. IRD was a preferential creditor but Montgomerie had a grim outlook for payment.

"There will be insufficient funds for any dividend payable to unsecured creditors," he wrote, predicting less than 20c in the dollar.

Henderson could not be reached for comment about the Precinct case yesterday.

He was one of Auckland's most active developers, building on Princes Wharf as well as a range of apartment and industrial projects.

He was expected to redevelop the historic Victoria Park Markets in a $130 million makeover but work has yet to begin at the markets Henderson bought in 2003.

He has kept a low profile for many months. Staff have left his Kitchener Group and last year he put his Princes Wharf apartment on the market. The apartment spans an entire floor of the seaside block with the Hilton Hotel beneath. Agents expected the property to fetch about $10 million but no sale was ever announced.

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10521768

[graemeh]

Thanks Muppet, but that's the wrong Dave Henderson. This thread is about the Christchurch one that beat the IRD not the Auckland one who was in court recently on drugs charges.

[tpr2]

I took from princess' statement that developers are able to protect their personal assets from litigation by appropriate entity structuring. We all do this, why would developers be any different?

Is there really a need to respond in such an unproductive manner?

Congrats Tony on sticking up for princess.
I am with you.

Captain Crab you may have a bit more knowledge about these things but your conduct is hardly professional. You are correct in your statements but slamming a fellow PTer and using expletives is hardly conducive to creating an environment where people can safely express themselves and seek new knowledge in the process.

Behaviour like that could see valuable contributors to the sight being put off because they do not want to face such a barrage.

Well done princess for standing up for yourself and responding. You are correct in the assumption that a measly 1% is insufficient return for the increase in risk however that is a statement about the poor regulatory environment that NZ operates under in the finance industry and investors are not informed of the increased risk they face when investing in these companies who provide second tier lending or even mezzanine finance.

cheers

Terry

[Judge]

Terry, you are reasonably junior on this forum, but seem to be calling the shots left right and centre. Your dramatic appearance on this forum with reference to multi million dollar apartments and boats made a number of people wonder what the hell was happening.
IMHO it may be wiser to refrain for telling people who is right and who is wrong, and leave this to moderators and those people who earned respect of other PTers through numerous useful/constructive posts over a long period of time on this forum.

[TonyMacaroni]

PT Bullies

Terry, you are reasonably junior on this forum, but seem to be calling the shots left right and centre. Your dramatic appearance on this forum with reference to multi million dollar apartments and boats made a number of people wonder what the hell was happening.
IMHO it may be wiser to refrain for telling people who is right and who is wrong, and leave this to moderators and those people who earned respect of other PTers through numerous useful/constructive posts over a long period of time on this forum.

'junior' - how is this measured? Don't you have less posts Judge? Is that your measure?

As a new poster but long time watcher can somebody please post a pecking order for the site on a sticky thread. I don't know, maybe based on net worth or whos been in the business longer. Then when I or others get really rude or sarcastic responses to genuine questions we'll know its OK because they are more 'Senior' than us.

Really need to watch this gang mentality if you guys want to keep this site popular into a property downturn. Seems to be some fairly inappropriate posts from what I can only assume are the 'PT elite' towards their perceived juniors...

[muppet]

Rival heads Five Mile development project
By MARTA STEEMAN - The Press | Thursday, 17 July 2008

Rival Auckland developer Nigel McKenna has been working on Christchurch developer Dave Henderson's Queenstown Five Mile township project for several weeks, and is now running the bid for planning consent.

McKenna has been appointed to do this by Five Mile receiver Rod Pardington, of accounting firm Deloitte Touche Tohmatsu.

A spokesman for Melview Developments, McKenna's firm, Klaus Sorenson, a public relations practitioner, said McKenna and Melview's counsel Warwick Goldsmith were in Queenstown this week at the planning hearing for rezoning of the Five Mile land.

McKenna will not talk publicly about his role. Sorenson said McKenna was an agent of the receiver, Rod Pardington, to pursue the development.

Originally from Ireland, McKenna, the son of a builder, is considered to be one of New Zealand's successful developers, and is working on the Flat Bush town development for 40,000 people in south Auckland.

Sorenson said McKenna had been working on Five Mile for several weeks for Hanover Finance, one of the first mortgage holders on Five Mile which had appointed the receiver.

The other first mortgage holder is NZ Castle, a company part owned by huge United States lender Fortress Credit Corp.

Henderson's plan was to develop a township for 10,000 people with a mix of high-density housing, retail and commercial and industrial development on the 32.4-hectare Frankton side alongside the Queenstown airport.

Henderson engaged acclaimed urban planners Duany Plater-Zyberk and their "new urbanism", a movement seeking to end suburban sprawl and revitalise communities, to develop the Five Mile project.

Sorenson said the shape of the Five Mile development might alter under McKenna to meet a changing market.

http://www.stuff.co.nz/4620728a13.html

[orbital]

'junior' - how is this measured? Don't you have less posts Judge? Is that your measure?

As a new poster but long time watcher can somebody please post a pecking order for the site on a sticky thread. I don't know, maybe based on net worth or whos been in the business longer. Then when I or others get really rude or sarcastic responses to genuine questions we'll know its OK because they are more 'Senior' than us.

Really need to watch this gang mentality if you guys want to keep this site popular into a property downturn. Seems to be some fairly inappropriate posts from what I can only assume are the 'PT elite' towards their perceived juniors...

The pecking order list is kept a closely guarded secret only when you are in the upper tier are you allowed to view it, and only the chosen are allowed to alter the list. So asking to view such a list is wrong of you, go to back of line brotha. I will let you on one secret it is all based on templer knights and something to do with de vinci code ..but you did not hear that from me as I obey code of silence.