O’FARRELL BANKRUPTCY Long fight to develop bay may have ended

Press, Volume CXV, Issue 33929, 23 August 1975, Page 1

O’FARRELL BANKRUPTCY Long fight to develop bay may have ended

Bankruptcy may put an end to Mr G. P. O’Farrell's proposed multi-million dollar development at Governor’s Bay.

Mr O’Farrell was declared bankrupt in the Supreme Court yesterday, after the Court was told that he was unable to meet a debt of 8105,000 owing on the purchase of a jade company.

Speaking after yesterday’s declaration, Mr O’Farrell said

[that his assets exceeded his liabilities and the bankruptcy had come about because of a lack of liquidity. He thought the bankruptcy might be annulled if all his creditors were paid off within six weeks, he said. He said that he had originally bought the Hokitika Jade Company, Ltd, in Hokitika, at an agreed price of $130,000. Of this $50,000 was paid in cash with the balance to be paid over a period of time. The Supreme Court later ruled that Mr O’Farreil should pay the original owners of the company, Mr and Mrs A. Moreton, a balance of $105,000, which w'ould have covered the interest lost through late payment. . Ruled but

Gerald O’Farrell came to New Zealand in 1967 and decided to make his home here. He bought up contiguous properties in Governor’s Bay, becoming the largest single landowner in the area.

He had hoped to develop Governor’s Bay itself, but the Mount Herbert County Council produced a reviewed district planning scheme in 1973 which effectively ruled out development of the O’Farrell properties. Objections were heard against the reviewed scheme up to April, 1974, but by then the council had decided to commission an environmental study of Governor’s Bay. In May, 1974, the council announced a variation of the review’ scheme which incorporated many of the recommendations of the environmental report—nd development at Governor’s Bay, but a small-scale development at Allandale. t Variation The Allandale project was a scheme to develop about 170 acres of the Allandale valley into a township separate from Governor’s Bay. The estimated population of this would have been about 800. After the local body elections last October, the new council announced a variation of the review scheme, which more or less reverted to the original review scheme, and excluded the Allandale project. Objections were heard against the review scheme but overruled. Mr O'Farrell had then lodged an appeal with the Town and Country Planning Appeal Board. The appeal was due to be heard this month or next. Mr O’Farrell said he had tried to hold out until the decision of the appeal board [which could have increased the value of his property by $3 million overnight. Expense He had spent an average of $6OO a day on his 2000 acres of property, and 200 acres had been sold in an effort to “stay afloat.” Because of the continuing expense, he said, he had put the Allandale land up for auction recently, but the auction was later cancelled because of inquiries the land agent had had after the announcement. .

Large organisations had not been interested because of the pending decision of the appeal board, so it was decided to sell smaller portions, and two blocks totalling more than 200 acres had been sold. Mr O’Farrell said the cost of the Governor’s Bay area

project had so far exceeded $1 million. An Auckland merchant bank, the Merbank Corporation, Ltd had helped with finance all along, he said. Finally it would not put up any more money unless he accepted the bank into a partnership. This was recently done, and Merbank had offered to pay $25,000 toward the Moreton debt.

Mortgaged property

All of the properties owned by Mr O’Farrell and Merbank are mortgaged. Mr O’Farrell lives in a house on one of the farm properties at Allandale. As well as the properties, and the jade company in Hokitika, Mr O’Farrell has a major shareholding in Bon Voyage Travel Service, Ltd. In January this year Mr O’Farreil financed an expedition to the Auckland Islands to search for the wreck of the General Grant, a clipper ship which sank off the coast in 1866 with gold said to be worth $300,000 aboard. He was to have returned to the islands at the end of the year with the same professional diving team to recover the gold.

He had formed another company, Archaeological Holdings, Ltd, to deal with any book and film rights as a result of the expedition.