insolvency

Serepisos arrested at airport

Ratbag Terry Serepisos, living life on the large has had the fun?times curtailed somewhat after being arrested at Wellington airport last night

Reality TV star and bankrupt property developer Terry Serepisos will appear in court after reportedly being arrested at Wellington airport last night.

Inspector John Spence told the Dominion Post Serepisos was taken to Wellington Central police station, and was then released on bail to appear in court this morning.

Inland Revenue reportedly asked police to meet Serepisos after he landed in Wellington on an inbound international flight.

Serepisos could not be reached for comment this morning.

Serepisos, the former host of the Zealand TV series of The Apprentice, has been before the courts over his debts and also lost control of Wellington’s Phoenix Football Club as he fought to stave off bankruptcy.

He was declared bankrupt in 2011.

Nine of Serepisos’ companies are currently in liquidation, according to the Companies Office.

Read more »

An insiders view of bankruptcy and insolvency in NZ

A reader emails:

Hi Cam

I read your blog from time to time and also tend to pick up pieces you run on insolvency type issues such as the one you ran recently titled “Bankruptcy is a Joke.”

I am in my 50s and have pretty well been part of the insolvency industry in NZ since the day I walked out of Uni all those years ago. I thought I would post a few pieces to you on insolvency to explain how it works and why we have so many issues in this area. I will also proffer some solutions, one of which would save the government money, direct public insolvency resources to better use and tidy the industry up a little

In the big picture insolvency procedures are critical to a capitalist economy. The business and consumer cycle in its simplest form has birth (of a business or a consumer) their life and their death (for the consumer not their literal death but their financial death). Insolvency is the ailment that leads to death. Insolvency procedures are in place to clean up the bodies and bury them. If you don’t clean up the bodies you end up with a stinking mess. At its heart it is the realisation of the assets that are left and a sharing of the proceeds of those assets amongst the creditors pro rata.

In this piece I will discuss liquidations. I will follow up later on bankruptcy and the use of trusts. There are 3 common ways a company can be placed into liquidation. By a shareholder resolution, by its board if the constitution allows (rare) and by an application to court usually by a creditor. With shareholder and board appointments the appointers choose the liquidator and if they consent before hand they are appointed. With a court application the petitioning creditor can seek consent from a liquidator to take the appointment. If no liquidator consents to the appointment then by default it goes to the Official Assignee. The Official Assignee also appoints themselves to liquidations of companies controlled by bankrupt shareholders.

As a general rule you can have confidence in private liquidators appointed by the court. Why? These liquidators have gone in at the request of a petitioning creditor and sometimes have an indemnity for fees. They are hardly going to bite the hand that feeds them. They are also less likely to favour the shareholders or directors over the creditors. At worst they might be professionally out of their depth and miss asset realisation opportunities. In some cases despite court appointment they just don’t do their job properly. But as I say this is rare in court appointments. If you scan public notices or the Gazette the bulk of court applications and appointments are on the petition of IRD. IRD has its owns liquidators in high profile firms and some others around the more provincial areas. These liquidators are as a general rule highly experienced and do a good job.

There has been a trend over the last few years for IRD appointments to go to the Official Assignee. This can only happen if IRD’s preferred liquidators do not consent to take the liquidations or IRD does not bother to ask them for a consent to be liquidator. I suspect the preferred liquidators are picking and choosing leaving the rest to go to the Official Assignee.

By far the bulk of liquidations in NZ are voluntary appointments by shareholders. 75% of shareholders can vote to put a company into liquidation and appoint a named liquidator. If the liquidator consents to appointment then they are appointed.

Why do companies go into voluntary liquidation? Some do so because they no longer have a purpose to exist. The business has been sold or ceased, creditors have been paid (or funds are there to pay them). These are usually solvent liquidations and a tidy up. They also allow a distribution of capital back to shareholders tax free. Other reasons are that the shareholders just come to the realisation that the company is insolvent and needs to go. There is not always huge creditor pressure it is just the right thing to do. Then there are voluntary liquidations that occur because a creditor is heading towards liquidating the company. If you look at the stats in the Gazette IRD is the petitioning creditor in the bulk of liquidation applications. However, there are some other organisations that apply a zero tolerance policy to debt collection -” if you don’t pay we will liquidate you.” That sends a good clear message. Unfortunately for most day to day creditors the cost benefit of liquidating debtors does not stack up and so they leave it to others usually IRD.

A stat demand is in effect a test of insolvency. When a creditor issues a stat demand if you don’t meet the debt or dispute the debt the company is deemed to be insolvent. The next step is to apply to liquidate on the basis that the company cannot meet its debts as they fall due.

Many companies at this point go into voluntary liquidation. Why? There are a number of reasons. Dealing with a failing company is stressful. Just biting the bullet and going voluntary is a sensible option. Having a liquidator of your choice appointed at your cost can avoid the harder scrutiny of a court appointed liquidator. And, in some cases the the voluntary liquidation regime provides an avenue to spirit assets away or allow transactions that have occurred in the 2 years prior to liquidation to go unchallenged. It can also shield directors from banning orders and other remedies for creditors under the Companies Act and other legislation. ?? Read more »

No rest for the wicked

terry-serepisos

Bankruptcy was kind to Terry Serepisos.

Those stung by Terry Serepisos entering?bankrupt will be delighted to learn that Whaleoil’s roving Hong Kong correspondent shared row 1 in Business Class with him flying on NZ118 Sydney to Auckland yesterday. ?She takes an extremely dim view of people who do not pay their bills and was happy to pass on the information to the news desk. ?It was lucky for Terry that he did not owe her money or any of her close friends else the three hour flight would have been a sledge hell.

Terry appears to be doing swimmingly.? Read more »

Lack of investigation trips up HoS

A couple of weeks go Bevan Hurley wrote a schlock piece about the owner of Blacktop Construction who has fallen on hard times.

Simon Everett has worked every Christmas over the past 15 years resurfacing the Auckland Harbour Bridge.

But this year, he’ll get to spend the holidays at home with his family – he’s just not sure if it’ll be in his own home.

Last month, his world fell apart when Blacktop Construction, the family company he’s built up over 28 years, was placed in receivership.

It’s left this proud, self-made father of two having to ask for handouts to survive.

“A month ago, I was driving a Lexus. Today, I’m driving a motor scooter,” he said this week.

“My wife is about to go to WINZ to ask for some emergency payments for our mortgage. I’m going to be bankrupt, I would say. My brother and sister are in a pretty similar position.”

The lowest moment came when bailiffs showed up at his elderly mother’s home asking for money.

Blacktop found itself squeezed out of the major road maintenance contracts, deals now the subject of a Serious Fraud Office investigation.? Read more »

Government needs to shake up insolvency practice

The NBR had a great article on the weekend about the slow burning?Insolvency Practitioners Bill. Written by?Murray Tingey, David Friar and Wayne Hofer from Bell Gully it highlights why there needs to be some controls and licensing around insolvency practitioners.

More than two years after the Commerce Committee reported back on the Insolvency Practitioners Bill, Parliament took up the second reading of the Bill on September 26 ? the next step in what has been a long and protracted process.

Under the current law, the restrictions on who can be an insolvency practitioner (such as a liquidator or receiver) are limited.? You must be over 18, not bankrupt or subject to the Mental Health Act, not related to the company, and not have a dishonesty conviction in the past 5 years.

There is no requirement that the practitioner have any minimum skills, qualification or experience, or even any requirement that the practitioner live in New Zealand.? There are also difficulties in enforcing the requirements as to who can be an insolvency practitioner. ? Read more »

Taking the Sere-piss-os

Bankrupts aren’t supposed to travel, normally, that is unless you are the supposedly bankrupt Terry Serepisos.

The Official Assignee has failed us, as they often do when confronted by master manipulators, psychopaths and crooks.

Models, international travel and erotically charged parties. Former Wellington property tycoon Terry Serepisos isn’t letting bankruptcy slow him down.

Mr Serepisos has been photographed this month in a high-end Prague hotel and on a horse-drawn carriage with a former Miss Universe NZ contestant.

He has also attended celebrity-studded parties and driven expensive cars, all while technically insolvent. When contacted about his trips yesterday, Mr Serepisos hung up on?The Dominion Post. ? Read more »

NZ?s dodgiest LBP Nominee ? David Dew

It looks like Marlborough has more than its fair share of ratbags running for office. Diesel thief Aaron Goodwin is shameless enough to run for council even though he was arrested for being a drunken idiot and saying he supports New Zealand First.

Marlborough ratbag David Dew

Marlborough ratbag David Dew

Next up is current councillor David Dew?who reckons he is fit for public office but can’t run a winery properly, let alone two so he liquidated his so he could run for mayor.

Marlborough District Councillor David Dew says he has put two of his companies into liquidation as he “clears the decks” to run for mayor in next year’s local body elections.

River Farm Vineyards and River Farm Wines were put into voluntary liquidation two weeks ago by their sole shareholder, Mr Dew.

He had decided to exit the wine business some time ago and had been winding down stock and vineyards owned, he said yesterday. Because of other commitments, he had handed over the process of completing this to PricewaterhouseCoopers, which would administer and market what was left to sell, mainly being two vineyards. The vineyards were being managed and the grapes in this year’s harvest had been sold.

There were minimal or no unsecured creditors outstanding, Mr Dew said, and the process would ensure things were tidied up while he devoted his energies to his legal practice and the Marlborough District Council, he said.

David Dew bottled his run for mayor. And he got even more bad press later last year.? Read more »

Dodgy council ratbag, kicks the handicapped on the way down

This gutless council creep who was running a business badly while on full time pay of a council has bankrupted handicapped people and they have had to sell their buildings.

Nature Green was put into liquidation in July 2012 and creditors are deciding whether they can afford the $150,000 bill to sue Mr Knight and Mr Massey. Mr Petterson said he believed the creditors had a case to sue for reckless trading and trading while insolvent and were owed $1.7 million.

“What I would like to see is the liquidator put forward some hard facts and file for court action. Let’s get this sorted out once and for all instead of leaking selective emails to the media,” Mr Massey said.? Read more »

Union Greed Drives California to Bankruptcy

The unions and their unreasonable demands have driven California bankrupt:

Absurd pay and benefits are common, and not just in Stockton. San Francisco Chronicle columnists Matier and Ross revealed recently that the Alameda County executive receives a $423,000 a year pay package for life. Compensation for California firefighters is in the $175,000 a year range. Some Newport Beach lifeguards receive $200,000 a year pay packages. As a friend of mine joked, revolutions have been fought over lesser instances of public pilfering.

Stockton pulled back on some abuses, but has left the main problem in place. Why is it OK that Stockton residents have to put up with closed parks, reduced policing and other cutbacks to protect outrageous pension and pay levels?

Currently, Stockton leaders are floating a tax increase plan to fund police officers. But money is fungible so this should be viewed as a tax designed to pay for past boondoggles. Whatever the court decides, it?s time for the public to stand up to these misshapen priorities.? Read more »

Cowboy Liquidators

Georgina Bond has an article at NBR about dodgy liquidators. I can tell you that from a recent investigation that the activities of numerous liquidators have come to my attention. I agree with Georgina that something needs to be done to rein in the predations of these rapacious liquidators.

The theft conviction of Nelson liquidator Pat Norris demonstrates why the laws regulating insolvency practitioners need reform, lawyers suggest.

Patrick Dean Norris, 55, is perhaps best remembered for the lurid headlines of two years ago when he made intimate recordings of his ex-wife and put Pink Batts in her underwear drawer.

Last week, the former Kawerau mayoral candidate was found guilty of theft by a person in a special relationship after a two-week, judge-alone trial at Nelson District Court.

Norris will be sentenced later this month.

The conviction relates to allegations he banked $80,900 from the liquidation of Auckland-based Astra Enterprises into the trading account of his company Norris Management Services and used the money for personal and business expenses.

The Crown said there was no evidence any creditors of Astra Enterprises had been paid.

Judge Michael Behrens QC found Norris ?engaged in a blatantly dishonest course of action? ??instructing his staff to create invoices for an amount to cover at least $80,000 after the Companies Office visited to inspect the Astra file.

Norris, who represented himself at the trial, has indicated he is likely to appeal the decision.

One lawyer I spoke to recently told me of one liquidator whose modus operandi is basically stand over where they confront directors, lawyers,?accountants? essentially who ever they identify as a potential target and demand cash/assets/recompense for turning a blind eye, and failure to do so will result in them visiting the Police to lay a complaint.

?[I]t is Bell Gully?s view a person convicted of a dishonesty offence should not be permitted to act again as a liquidator of a company.

?This is particularly so where the dishonesty occurred in the course of a liquidation, such as here, where Norris stole funds from the company and its creditors,? Mr Tingey says.

The Insolvency Practitioners Bill, before Parliament, would redress this by disqualifying any person convicted of a crime involving dishonesty from being a registered insolvency practitioner, unless the court orders otherwise.

Yet there will still be deficiencies, Mr Tingey says.

?The bill only introduces a negative licensing regime, excluding people from acting as a liquidator if they are disqualified in some way. It does not introduce a positive licensing regime, requiring minimum qualifications for an individual to act as a liquidator.

?As a result, it would not appear to prohibit someone such as Mr Churchill from acting as a liquidator. Indeed, it would appear to allow Mr Churchill to register and hold himself out as a registered insolvency practitioner,? Mr Tingey says.

?The label ?registered insolvency practitioner? implies that the practitioner meets a minimum standard of proficiency, when he or she may not be qualified at all.?

The Norris case illustrates why the bill should contain a positive licensing regime, with minimum standards for individuals to be able to hold themselves out as registered insolvency practitioners, he says.

It is real wild west stuff out there. As I said I have come across numerous examples since picking the scab off the industry. There is a real rapaciousness out there and I have seen evidence where company directors with relatively small cashflow issues have been picked clean after seeking restructuring and insolvency advices from the cowboy operators.