Published 16 December 2010
Metropolis developer Andrew Krukziener conceded defeat yesterday in his long-running battle with Inland Revenue and filed for bankruptcy.
He withdrew his application for approval for a formal insolvency scheme on 22 November in the hope that he could win agreement from Inland Revenue for an informal scheme, but the department remained opposed.
He had until today to get support for the informal proposal, but filed a debtor’s petition for bankruptcy yesterday.
The bankruptcy application was over an undisputed debt of $576,800, arising from a “loans-is-income” case from 1991-2002 – Inland Revenue regarded any money Mr Krukziener borrowed from his trust as income in his name. On top of that, Inland Revenue had applied penalties & interest from 1991 and then every year. Inland Revenue claimed Mr Krukziener owed $6.7 million.
Counsel for Mr Krukziener, Bruce Stewart QC, said in opening the case in the Auckland High Court last month total creditors had been reduced from $76 million to $47 million since a majority by number approved his scheme in June. 10 creditors owed $22 million supported his formal proposal, which would have seen him pay his creditors $250,000 in 2½ years, followed by 2 payments of $50,000 over the next year.
U: The names behind the action, the week to 21 November 2010, part 4, Krukziener argues for debt compromise
22 September 2010: Krukziener loses tax appeal, says it won’t affect insolvency scheme
U: The names behind the action, the week to 13 June 2010, part 1, Krukziener insolvency proposal application adjourned, tax appeal also in court
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Attribution: Insolvency Service, court, story written by Bob Dey for the Bob Dey Property Report.