Crunch time for Lake Hayes subdivision

Paul NicholsonDunedin businessman Paul Nicholson has until 5pm today to pay the $10.8 million balance of an Otago subdivision purchase - or face losing investors' $1.2 million deposit.

A spokesman for Mr Nicholson is confident the deal will be clinched by the deadline, saying "intense negotiations" with the subdivision's receivers were still under way to finalise the "loose ends in what is a complex land deal".

Mr Nicholson, and his new private property investment company Bendemeer Trustees Ltd, is already more than three weeks overdue paying for the 24-section subdivision near Lake Hayes; but contractually the delay is allowed.

PricewaterhouseCoopers receiver Malcolm Hollis confirmed late on Friday Mr Nicholson has until the close of business today to settle the outstanding $10.8 million, or his $1.2 million non-refundable deposit paid in May will "certainly be forfeited".

Mr Nicholson's last private investment company, Hurricane House, was placed in liquidation in February 2009 owing about 25 investors $4.2 million.

While having invested successfully in commercial property for several years, Mr Nicholson then lent about $4.5 million, unsecured, to a Christchurch Finance company which later collapsed itself, owing about $17 million.

Mr Nicholson subsequently started Bendemeer Trustees Ltd last April and attempted to raise money from investors to buy the 24-section Bendemeer subdivision near Lake Hayes for $12 million from the receivers.

Mr Hollis added that the receivers had a "back-up position"; in that another buyer was waiting in the wings should Mr Nicholson fail to settle.

Mr Nicholson has in recent weeks declined to be interviewed, and instead nominated investor Brian Donovan, of Christchurch, to speak on his behalf.

When contacted late on Friday, Mr Donovan said Mr Nicholson was "too busy" to called, but said the Bendemeer deal was "a happening thing"... but "I can't say that its crossed the [finish] line".

- simon.hartley@odt.co.nz