The legal battles over Sensation Yachts continue to grab headlines in its home country of New Zealand. Last week, word came that a new fight will be settled in court this November.
According to a few reports, HSBC, which holds an unpaid mortgage on Sensation, filed court documents last month in an attempt to force the removal of three partially completed megayachts and other items ("chattel," in legal terms) from the property. The goal is to sell the land to recoup a reported NZ$6.5 million (about US$4.6 million) investment. However, the court just ruled that a trial must be held instead.
As noted last year, Sensation was placed into receivership and liquidation, after the yard’s former chief, Ivan Erceg, failed to pay several creditors, including Det Norske Veritas. Erceg also failed to pay HSBC, so the bank is now the mortgagee in possession. On a related side note, Erceg himself was placed in bankruptcy by court order in February of this year. He is reportedly fighting that ruling.
The three yachts are among five superyachts that were commissioned several years ago by Balenia, a Cayman Islands firm. (Construction never started on two of the five.) The first yacht was expected to be completed in 2005, with the last one finished by 2007. The bank wanted the projects moved because, its lawyers argued, they had nothing to do with the land and therefore the attempted sale of the property. Balenia, however, objected to HSBC’s request because the hulls are each in excess of 50 meters (165 feet) and, it claims, there is nowhere nearby to store them.
Further complicating matters, some of Sensation’s receivers also have disputes with Balenia. Last October, when HSBC became mortgagee in possession, these receivers did not want the partially completed yachts to be relocated until their claims were resolved.
The trial is expected to last two days. More news once the judge issues his ruling.
While we await those results, one thing does seem to be clear at this stage: The legal wrangling threatens to last longer than the company has been out of business.