The future of the $2 billion Five Mile housing project near Queenstown remained unclear last night, after the main company behind the project went into receivership.
Entrepreneur Dave Henderson's company Five Mile Holdings Ltd was put into receivership yesterday by lender Hanover Finance, because of loan repayment defaults.
A Queenstown Lakes District Council staff member told a council plan-change hearing committee yesterday Mr Henderson was considering making an application for an interim injunction against the appointment of the receiver.
Mr Henderson, who was in Queenstown yesterday and attended a Queenstown Lakes District Council plan-change hearing, did not return calls from the Otago Daily Times yesterday.
TV3 last night reported Mr Henderson was to meet his lawyers to discuss an injunction against the receivership, which he had earlier described as improper.
There has been no work on the 33ha Queenstown site since February.
Hanover Finance, whose largest loan is understood to be the Five Mile development, instructed its trustee company, FMH Nominees, to appoint a receiver, Deloitte partner Rod Pardington, of Auckland, as a result of "unremedied loan defaults", which "arose several months ago".
Companies Office records confirmed Deloitte was appointed receiver on Wednesday.
Hanover Finance believed the appointment of a receiver was "in the best interests of its investors and other stakeholders to exercise its rights as a secured creditor", Mr Pardington said.
"Accordingly, a receiver has been appointed to Five Mile Holdings so that the assets can be best managed for all interested parties and the loan repaid, in due course."
Five Mile is an ambitious project to build a high-density township for 10,000 people at Frankton, near Queenstown Airport.
The development is in its early stages, with a large hole dug where work had started on an underground car park.
Under the receiver, the Five Mile project is expected to proceed with a supermarket development with related commercial and residential building, but is likely to be greatly scaled back.
The New Zealand Herald reported yesterday Hanover was understood to be owed about $70 million by the Five Mile Holdings' parent company, Property Ventures, and had security over the land near Queenstown Airport worth more than $100 million.
Mr Pardington yesterday declined to reveal the level of debt and securities, but confirmed the principal asset was Five Mile's 33ha of land.
A sale of some of the 33ha could cover the Hanover debt, but to achieve current market value the receiver could sell all the land, Mr Pardington said.
Notice was published on June 30 that application had been made to the High Court in Christchurch to have Five Mile Holdings and Property Ventures placed in liquidation, for a debt owed to Christchurch-based Smith Crane and Construction.
The receiver, on behalf of Hanover Finance as a secured creditor, takes precedence on the secured assets.
There were unconfirmed reports last night the Five Mile project was in the hands of another Queenstown developer, Nigel McKenna, who is involved in a billion-dollar hotel development project, Kawarau Falls.
Mr McKenna's Melview Developments is building the first hotel, The Westin Queenstown, due to be finished next year.
Construction of an Intercontinental Hotel and The Quadrant are due to start later this year.
Melview spokesman Klaus Sorenson yesterday replied "no comment" when asked by the ODT if Mr McKenna would be involved in the reshaping of Five Mile.
Additional reporting: Jude Gillies and NZPA
