Archive | Krukziener

Krukziener concedes defeat

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.

Earlier stories:

23 November 2010: Krukziener abandons court application, tries last-ditch informal compromise

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

14 April 2010: Krukziener files debt compromise, gets adjournment of IRD bankruptcy action

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Attribution: Insolvency Service, court, story written by Bob Dey for the Bob Dey Property Report.

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Krukziener abandons court application, tries last-ditch informal compromise

Published 23 November 2010

Property developer Andrew Krukziener has 3 weeks to put together an informal insolvency scheme with his creditors – including Inland Revenue – after withdrawing his application for a formal scheme yesterday, at the start of the third day’s court hearing on it.

Associate Judge Rob Osborne adjourned Inland Revenue’s application to bankrupt him until Thursday 16 December.

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 week 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, whicvh would have seen him pay his creditors $250,000 in 2½ years, followed by 2 payments of $50,000 over the next year.

Earlier stories:

U: The names behind the action, the week to 21 November 2010, part 4Krukziener 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

14 April 2010: Krukziener files debt compromise, gets adjournment of IRD bankruptcy action

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Attribution: Counsel, story written by Bob Dey for the Bob Dey Property Report.

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Krukziener loses tax appeal, says it won’t affect insolvency scheme

Published 22 September 2010

Inland Revenue has backed up its win over property developer Andrew Krukziener at the Taxation Review Authority with another win in a High Court appeal, but still may fall well short of getting its money.

Mr Krukziener said yesterday he hadn’t decided yet on a further appeal, but said Inland Revenue’s victory in the High Court case heard by Justice Patricia Courtney wouldn’t alter his debt-compromise scheme with creditors.

“In my compromise, I had them in there on the basis that they’re going to win, because at the time we lodged our proposal we’d lost at the Taxation Review Authority.”

One of the issues in the case before Justice Courtney concerned money Mr Krukziener received from a trust, which Inland Revenue counted as income. His lawyer, Mike Lennard, said Mr Krukziener borrowed from that trust up to 1996, but other trusts owed him money. “It wasn’t tax avoidance. There were no available profits – a loan is neither income nor capital gained…. There were capital profits realised from sale of investment properties.”

However, the judge said the effect of the arrangement was clearly tax avoidance, at least in the sense of deferring the tax obligation.

Mr Krukziener’s insolvency scheme and Inland Revenue’s bankruptcy application are due back in court on Tuesday 12 October for mention, with a 2-day Auckland High Court hearing set down for Wednesday-Thursday 17-18 November.

Mr Krukziener has proposed a $250,000 payment in 2½ years, followed by 2 payments of $50,000 over the next year. In court in April, Mr Krukziener’s lawyer, Lawrence Herzog, said the debt compromise covered debts estimated at $50 million, but 64% of that was secured so the overall 0.7c:$1 payment estimate was likely to be well short of actual payment. Mr Herzog said the figure was more like 2.7c:$1 – and Mr Krukziener said, back in his office after the hearing, the eventual payment was likely to be in double figures. He said most of the eventual debt would be tax, but nowhere near the $6.7 million Inland Revenue was claiming.

Earlier stories:

U: The names behind the action, the week to 13 June 2010, part 1, Krukziener insolvency proposal application adjourned, tax appeal also in court

14 April 2010: Krukziener files debt compromise, gets adjournment of IRD bankruptcy action

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Attribution: Judgment, phone interview, story written by Bob Dey for the Bob Dey Property Report.

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Krukziener files debt compromise, gets adjournment of IRD bankruptcy action

Published 14 April 2010

Metropolis developer Andrew Krukziener has fought off a Companies Office attempt to ban him from being a director, says he has won all but one of his tussles with Inland Revenue over years of what he describes as persecution, and yesterday got an IRD attempt to bankrupt him adjourned after he filed a debt-compromise proposal.

 

The banning attempt, in 2006, ended with a commendation for his behaviour as a director from Companies Office deputy registrar Peter Barker.

 

The bankruptcy application was over an undisputed debt of $576,800, arising from what Mr Krukziener said was a “loans-is-income” case from 1991-2002 – any money he borrowed from his trust was regarded as income in his name. On top of that, Inland Revenue had applied penalties & interest from 1991 and then every year.

 

In court, Inland Revenue counsel Nick Malarao argued that Mr Krukziener was plainly insolvent, had failed to set aside the bankruptcy notice on grounds that the Commissioner of Inland Revenue had abused his office, had breached his duties as a company director, had engaged in tax avoidance and it was in the public interest that he be bankrupted immediately because of the commercial risk he posed.

 

Mr Malarao said the payments for Mr Krukziener’s debt compromise were said to be guaranteed by a trust, but there was no independent evidence of the financial position of that trust. Mr Krukziener had provided guarantees to his creditors before, but this had proved of little value to them.

 

Mr Malarao added that Mr Krukziener had “restructured his affairs in a way that his personal asset position is very bare, so the appropriateness of giving guarantees does come into question”.

 

Mr Krukziener’s lawyer, Lawrence Herzog, said the debt compromise covered debts estimated at $50 million, but 64% of that was secured so the 0.7c:$1 payment estimate was likely to be well short of actual payment. Mr Herzog said the figure was more like 2.7c:$1 – and Mr Krukziener said, back in his office after the hearing, the eventual payment was likely to be in double figures. He said most of the eventual debt would be tax, but not the $6.7 million claimed in the court hearing.

 

Mr Krukziener is proposing a $250,000 payment in 2½ years, followed by 2 payments of $50,000 over the next year.

 

Mr Herzog told Associate Judge Roger Bell the proposal had indications of support from 75% of creditors and would go to a meeting on Monday 31 May. He also told the judge Inland Revenue had no evidence of tax avoidance, was completely wrong about breaches of director’s duties, and that Inland Revenue’s efforts to bankrupt Mr Krukziener – when it was normal to adjourn for a proposal to be put – could be seen as an attempt to prevent Mr Krukziener continuing with an appeal before the Taxation Review Authority, due to be heard on 10 June.

 

The judge adjourned the matter until Tuesday 8 June at 11.45am, to allow the creditors’ meeting to proceed.

 

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Attribution: Court hearing, banning documents, interview, story written by Bob Dey for the Bob Dey Property Report.

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Hanover & Krukziener settle their differences

Published 20 March 2009

Hanover Finance Ltd and property investor & developer Andrew Krukziener have reached a confidential settlement over roughly $7 million claimed each way.

 

Hanover had been trying to get a bankruptcy order against Mr Krukziener for 2 years. Mr Krukziener claimed Hanover would owe him more than he owes it once he won an appeal (against a decision not to set aside the bankruptcy notice) & counter-claim. But the claims involved different companies within Hanover so there was no direct set-off.

 

The original Hanover loan was on Mr Krukziener’s investment in the Old Customhouse building in Auckland and the principal has all been repaid.

 

The parties were due in court on Monday but didn’t appear, as the whole dispute was discontinued.

 

Earlier stories:

17 February 2009: Hanover to get interest at 18%, Krukziener bankruptcy hearing now in March

24 December 2008: Judge says no to Krukziener request for security for costs against Hanover

 

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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

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Hanover to get interest at 18%, Krukziener bankruptcy hearing now in March

Published 17 February 2009

Hanover Finance Ltd won court approval today to bill interest on a 2-year-old judgment against property developer Andrew Krukziener at the contract rate of 18%, but still hasn’t won the bankruptcy it’s been fighting for.

 

Hanover won judgment in March 2006 for $4,159,386.61, but no decision was made at that time on the rate interest on that judgment was to be charged at – contract or Adjudicature Act.

 

In the Auckland High Court today, Justice Patricia Courtney ordered that interest be payable at the contract rate, compounded monthly, so it reached $2,822,187.08 by today, taking the total Mr Krukziener owes Hanover to $6,981,573.69.

 

Counsel for Hanover, Laura O’Gorman, sought a 2-week adjournment of the company’s application to bankrupt Mr Krukziener, who wasn’t represented and didn’t appear in court.

 

Ms O’Gorman said Mr Krukziener didn’t oppose the interest calculation and had withdrawn both his application to stay adjudication and his notice of intention to cross-examine.

 

Justice Courtney adjourned the case to the duty judge list on Wednesday 4 March at 11.45am.

 

Mr Krukziener has claimed Hanover will owe him more than he owes it once he wins an appeal (against a decision not to set aside the bankruptcy notice) & counter-claim. No indication has been given on when they might be heard.

 

Earlier stories:

24 December 2008: Judge says no to Krukziener request for security for costs against Hanover

18 December 2008: U: The names behind the action, the week to 21 December 2008, part 7Krukziener & Hanover continue scrapping on way to February hearing

21 November 2008: U: The names behind the action, the week to 23 November 2008, part 45 creditors support Krukziener against Hanover bankruptcy action

 

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Attribution: Court hearing, story written by Bob Dey for the Bob Dey Property Report.

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Judge says no to Krukziener request for security for costs against Hanover

Published 23 December 2008

Associate Judge Hannah Sargisson has rejected a novel request by property developer Andrew Krukziener for judgment creditor Hanover Finance Ltd to provide $15,000 security for costs in the company’s pursuit of bankruptcy proceedings against him.

 

The judge heard the application by counsel Rob Hucker on 18 December and issued her reasons for rejecting the request today.

 

Hanover Finance has judgment against Mr Krukziener for $4.1 million, which is now beyond the appeal period. Mr Krukziener claims Hanover will owe him more than he owes it – both sums by now in the range of $6 million – once he wins an appeal (against a decision not to set aside the bankruptcy notice) & counter-claim.

 

But Associate Judge Sargisson said Mr Hucker had been unable to provide any legal authority for a creditor to provide security for costs, nor why the judgment debt itself shouldn’t be treated as effective security.

 

And she said Mr Krukziener had done his cause no favours by still not settling his appeal case, 4 months after judgment was handed down, and hadn’t applied for a hearing date: “If ever there was a case where the court should order security for costs because of an appeal, this is not it.”

 

Mr Krukziener had also raised the effect on himself & his family if he was adjudicated bankrupt and couldn’t operate as a developer. Said the judge: “While the effect of adjudication on a debtor & the debtor’s family can be harsh, the effect on the debtor’s ability to operate in business is precisely the effect an order of adjudication is intended to have as a matter of public policy.”

 

The judge said the debt payable by Mr Krukziener was a liquidated sum payable immediately, while his appeal & counter-claim were discretionary matters.

 

Mr Krukziener’s application to stay execution of the bankruptcy judgment is due to be heard on Tuesday 17 February.

 

Earlier stories:

18 December 2008: U: The names behind the action, the week to 21 December 2008, part 7Krukziener & Hanover continue scrapping on way to February hearing

21 November 2008: U: The names behind the action, the week to 23 November 2008, part 45 creditors support Krukziener against Hanover bankruptcy action

 

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Attribution: Judgment, story written by Bob Dey for this website.

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