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Sue Tierney - what's the latest?

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  • Sue Tierney - what's the latest?

    Voluntary liquidation: Tierney renames & closes Mortgages By Design, opens new company under old name
    Company: Pin Ltd (ex-Mortgages By Design Ltd)
    Directors: Sue Tierney, St MarysBay
    Liquidation:23 December
    Solvent: No
    Liquidators: Jeff Meltzer & Lloyd Hayward (Meltzer Mason Heath)
    Creditors’ claims: Thursday 18 February
    Other details: The company changed its name on 7 December, when Ms Tierney incorporated a new Mortgages By Design Ltd. The original company was unable to meet a court order in favour of a former contractor. Ms Tierney is president of the Auckland Property Investors’ Association and a director of Gulf Retreats Ltd, Insurances By Design Ltd, MBD Services Ltd, Mihakis Properties Ltd & Ponsonby Angels Ltd.
    http://www.propbd.co.nz/afa.asp?idWe...&SID=939328314
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    New company, same name, but the debts are history

    New company, same name, but the debts are history
    by Greg Ninness - Sunday Star Times Last updated 05:00 17/01/2010

    A PROMINENT mortgage broker has liquidated her company and created a new one under the same name, leaving behind a court-ordered debt to a former contractor.
    Sue Tierney, president of Auckland Property Investors Association and founder of well-known mortgage broker Mortgages by Design, placed her company in liquidation on December 23, two weeks after changing its name to PIN Ltd.
    On December 7, the day of the name change, Tierney formed a new company called Mortgages By Design. Both companies had the same registered address and the same ownership structure, with each owned by a trust associated with Tierney, who was also the sole director.
    It's a classic phoenix company arrangement, so-called because a new company rises from the ashes of the old and continues on with the same business under the same name and management as the previous company, but usually without any ongoing obligations to the previous business.
    The liquidator's report for PIN Ltd (formerly Mortgages by Design) states that the company had debts of $421,895 and no assets.
    "It is unlikely there will be a distribution to creditors," the report said.
    According to the report, the company struck financial difficulties when it lost a court battle over money which a contractor claimed it was owed.
    "The company traded as a mortgage broker and was subject to a claim by a former contractor. Ultimately, the court found in favour of the claimant, however the company is not able to meet the debt awarded by the court. The shareholders concluded that the company be placed into liquidation," the report said.
    The size of the debt was not given, although the report notes unsecured creditors were owed $70,000.
    The use of phoenix companies to continue operating a business which has become insolvent has long been a sore point with creditors who often miss out on money they are owed under such schemes.
    Two years ago the government amended the Companies Act to discourage the use of phoenix companies. The changes made directors and managers of phoenix companies potentially personally liable for the new company's debts and, in some circumstances, also liable for fines of up to $200,000 or a prison term of up to five years if the process was abused.
    But the legislation also allowed directors of phoenix companies to be exempted from those sanctions, provided they acquired the business of the failed (predecessor) company from its liquidator and advised the creditors of the failed company of the new arrangements.
    Tierney said she had never heard of phoenix companies and did not know what they were, or that the liquidators of PIN Ltd had issued a report on its liquidation.

    She referred all questions to PIN's liquidator, Jeff Meltzer of Meltzer Mason Heath.
    Meltzer said he always advised his clients in such situations to write to their creditors and advise them of what was happening.
    "What one should do [as a director of a phoenix company] to protect oneself, is write to all of the suppliers and say we have acquired the assets of the old company and are trading under the same name, to put everybody on notice about what's happened. That's the steps for a prudent director," he said.

    http://www.stuff.co.nz/sunday-star-t...ts-are-history
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

    Comment


    • #3
      Well that's us getting ourselves a new broker then
      Jo Birch
      Looking for someone to manage your next project or event? Then call now!
      +61 450 148 678

      Comment


      • #4
        APIA President liquidates company to avoid creditors

        "The company traded as a mortgage broker and was subject to a claim by a former contractor. Ultimately, the court found in favour of the claimant, however the company is not able to meet the debt awarded by the court. The shareholders concluded that the company be placed into liquidation,"

        http://www.stuff.co.nz/business/3235...ts-are-history

        Comment


        • #5
          Sad, you need to be able to trust your broker to be straight up. How could a broking business get 500K in debt except via mismanagement or......??

          Comment


          • #6
            Bout time Heg
            http://www.propertytalk.com/forum/sh...d.php?t=24374&

            Comment


            • #7
              In all honesty (unlike MBD), would anyone stay with a broker that has done this? I'm sure lots of people/businesses have pulled this stunt in the past but how can a Mortgage broker do this and expect not to lose customers?
              Jo Birch
              Looking for someone to manage your next project or event? Then call now!
              +61 450 148 678

              Comment


              • #8
                Phoenixing is now illegal so that is problem 1. But surely the bigger question is how does a broker get half a million dollars in debt they can't pay when they are a financial advisor/professional?
                This is not debt from investing or whatever, it appears to be direct losses inside a broking company. It would take real incompetence a miracle to lose that much money broking wouldn't you think?

                Comment


                • #9
                  The article says the debt arose from them losing a court case
                  The liquidator's report for PIN Ltd (formerly Mortgages by Design) states that the company had debts of $421,895 and no assets.

                  "It is unlikely there will be a distribution to creditors," the report said.

                  According to the report, the company struck financial difficulties when it lost a court battle over money which a contractor claimed it was owed.

                  "The company traded as a mortgage broker and was subject to a claim by a former contractor. Ultimately, the court found in favour of the claimant, however the company is not able to meet the debt awarded by the court. The shareholders concluded that the company be placed into liquidation," the report said.

                  The size of the debt was not given, although the report notes unsecured creditors were owed $70,000.
                  Jo Birch
                  Looking for someone to manage your next project or event? Then call now!
                  +61 450 148 678

                  Comment


                  • #10
                    Here is an extract of the news item....

                    A prominent mortgage broker has liquidated her company and created a new one under the same name, leaving behind a court-ordered debt to a former contractor.

                    Sue Tierney, president of Auckland Property Investors Association and founder of well-known mortgage broker Mortgages by Design, placed her company in liquidation on December 23, two weeks after changing its name to PIN Ltd.

                    On December 7, the day of the name change, Tierney formed a new company called Mortgages By Design. Both companies had the same registered address and the same ownership structure, with each owned by a trust associated with Tierney, who was also the sole director.

                    It's a classic phoenix company arrangement, so-called because a new company rises from the ashes of the old and continues on with the same business under the same name and management as the previous company, but usually without any ongoing obligations to the previous business.
                    And this comment suggested it's risky business continuing to trade with a phoenix co.

                    Two years ago the government amended the Companies Act to discourage the use of phoenix companies. The changes made directors and managers of phoenix companies potentially personally liable for the new company's debts and, in some circumstances, also liable for fines of up to $200,000 or a prison term of up to five years if the process was abused.
                    Source

                    So what happens next?

                    How can you have so much debt and zero assets?

                    Cheers,

                    Donna
                    Last edited by Perry; 18-01-2010, 10:31 AM. Reason: formatting
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                    Comment


                    • #11
                      When will she resign as president of the Auckland Property Investors Association?

                      Comment


                      • #12
                        And resign from the Mortgage Brokers Association. How can you have someone on the Board who deliberately liquidates a company to avoid paying one of their own mortgage brokers?
                        Its outrageous and I hope the Commerce Commission take her to task and overturn what has happened.

                        Comment


                        • #13
                          Apparently the court case she lost was only for 70K but there was nearly 400K of other creditors left in the lurch :-(

                          Comment


                          • #14
                            I would guess that loans would be in the name of the business (deductibility purposes) secured by the bank on property owned by a trust or other related entity. The debt from the bank probably swapped over to the new business, but not necessarily so for unsecured creditors.

                            Comment


                            • #15
                              No this is a broking business, unlikely to have property any in it.
                              Goodness only knows what the debt could be. Our broking business has debt of $0??

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