Raymond named as collapsed company’s controller
A peculiar game was played out in the High Court this week, as three-times-bankrupt developer Graeme Raymond’s nemesis, Richard Downey, rose once more in pursuit.
Mr Raymond wasn’t to be seen, but his name cropped up in allegations that he has been controlling the affairs of Wise Lass Residential Ltd, a residential subdivision company which has been placed in liquidation twice this week.
The company’s sole director and holder of its 1000 shares is Debbie Shuttleworth, according to Companies Office files, although documents prepared for the voluntary liquidation on Monday showed three shareholding signatories.
A Wise Lass subdivision at Waiuku was abandoned and taken to mortgagee auction in July by Reeves Moses Hudig Mortgage Nominee Co Ltd, which signed up for a $1.2 million mortgage but could get only an $825,000 top bid. Mr Downey reckons the company’s creditors are owed at least $1.5 million, with the prospect of payout unknown.
Mr Downey pursued Mr Raymond through the courts two years ago, when Raymond apartment projects turned sour. Mr Raymond blamed Mr Downey for his business collapse, but the collapse seemed well on the way before Mr Downey got stuck in.
Among the Raymond companies to fall over in that round were Rock Investments and First Investments. At the end of it, Mr Raymond was bankrupted for the third time, when he was still only 35. He also faces Companies Act charges relating to his bankruptcy, with a depositions hearing in the Auckland District Court on Friday 18 August.
As all the cards collapsed in 1998, First Investments went into voluntary liquidation. That move was opposed by the Auckland commercial affairs division of the Commerce Ministry, which went to court to overturn the appointment and get a neutral liquidator appointed.
A similar event has happened with Wise Lass. The appointment of accountant Clive Johnson as liquidator was made on Monday and announced in the NZ Herald’s public notices on Thursday. In the High Court on Wednesday, Master Faire refused to allow an ex parte application to appoint an interim liquidator, giving instructions that the company and its officers were to be served with notice of the application.
Come Friday afternoon and Mr Downey, lawyer Chris La Hatte and insolvency practitioners Bernie Montgomerie and Bill Ferguson were still trying to get the appointment of an interim liquidator not appointed by the company and not predisposed to its or Mr Raymond’s interests.
Mr La Hatte said the liquidator appointment documents presented by Wise Lass’ counsel, George Bogiatto, had the date but not the time on them, as nowadays they should, so it could not be ascertained that Mr Johnson had signed a consent before being appointed.
Master Faire accepted that if that were the case, the appointment would be void. Mr Bogiatto proposed a creditors’ meeting at short notice, which would allow creditors to decide who should be liquidator. Meanwhile, he said the Montgomerie-Ferguson team was unacceptable, and for a while also ruled out the Official Assignee, who might pass the work on to Messrs Montgomerie and Ferguson.
At 4.25pm, the lawyers reached consent, the OA was appointed interim liquidator and a creditors’ meeting is to be held within seven days.
The legal footwork seems pedantic and a world from modern-day reality, but was essentially about securing of documents in safe hands, with the two sides viewing safe hands very differently.
Appointment of the OA was odd, because the government agency has worked hard at getting out of handling liquidations, passing the work on to private practices, and its ability to handle any liquidation work was questioned. However, in this case the office was considered an independent arbiter.
But the consent order left the status of Mr Johnson’s appointment unresolved, although the order meant he lost his job. It was not clear whether Master Faire would have had the power to remove Mr Johnson, which in the end became unnecessary. Nor was it clear that there was a proper basis for the appointment of the OA, because Mr Bogiatto had challenged the status of the creditor seeking the appointment, Jim Bull, who he said had settled with Ms Shuttleworth.