Sue Tierney - what's the latest?

[Heg]

Still waiting to hear back from Sue. I have to date, sent two messages asking to know what is going on.

[drelly]

Hey Peter,

Fair enough. Sue's no fool. She'll be well aware that there will be fallout now that it's public. In the absence of an explanation, people are inevitably going to make assumptions.

Sure, she's not accountable to us on PT but as a reasonably high profile business owner in the property community and PIA President, she'll realise that there will be more scrutiny of her actions than someone else less visible.

Unfortunately, the prominance that she has benefited from in the past is more of a curse to her now. I expect that she's being bombarded with people wanting to know more.

It may not be practical (legally or otherwise) for her to comment publicly at the moment but if I were her, I'd want to end the speculation if I could.

[CJ]

How she handles the PR fallout from the end of the litigation etc is her business. (Likewise her role in APIA.)

Everyone knows that in the Jury by media (and internet forum) one is guilty till proven innocent.

I dont care about her business (her clients can make an ill informed decision) but she is an elected member of a large association to which I am a paying member. Silence should not be an option unless she resigns her role.

This has the ability to tarnish the association in the public eye at just the time when we may need the associations lobbying ability (the TWG paper is due out in less than 1 hour).

[spaceman]

Yeah ...nah ...but????

Isn't the entire point of having a limited liability company, to do what she has done?????

The company limits any liability...... the creditors are owed money by the company ... if it is wound up then there is nobody left for the creditors to ask for money ...... isn't that the whole point????

The whole rebirth of the compnay under the same name .....I would assume she took advice so as to comply with the pheonix laws .... if not that appears to be the only thing that's off kilter and does the name of the new company really matter all that much.

There are plenty of people advocating all sorts of asset protection stategies on this site ..... isn't this simply an example????

Cheers
Spaceman

[Perry]

Right - listen up, folks!

The PT Mods have become a little concerned at the
trend and tenor of this thread. Or, more accurately,
some of the content/posts made in it.

Is that what it is? To much 'information' and not
enough facts?

Whatever it is, please take a few breaths before
hitting the [Submit Reply] button. There is no problem
with you saw it here first exposes, so long as they
are factual. The PT forums are discussion forums,
not a kangaroo court.

Perry
PT Moderator

[Perry]

Forumites, Rumourers, PT Junkies . . .
Lend me your ears.

As described a few posts back the PT Mods have
become concerned at the way this thread has,
errr, 'evolved.'

The finger-pointing and some of the associated
pictorial satire was, well, shall I say, ill-conceived.

As observed before, there are some feisty folk
about the PT Forums, many with very strong
views about numerous aspects of PI and just
what are good ethics in a PI. Even generally.

Rather than purge this thread of 'distractions,'
so as to get it back on topic and focussed on the
thread title, it's going to stand as it is - for now.
But there's a caveat.

Any more personally-directed satire, either by
implication, innuendo or direct reference will
have consequences. What those will be shall
be commensurate as determined by the PT
Mods, should any transgressions to this new
warning-shot occur.

Y'all be nice to one another, y'hear?!


Perry
PT Moderator

[donna]

A reminder of what this thread is about...

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

Greg Ninness is a well respected journo - personally I believe what he has written here and there's no evidence to the contrary.

Cheers,

Donna

[revdev]

Members,

The moderators have temporarily locked this thread, while posts are reviewed.

Cheers,
Gary
PT Moderator

[Perry]

Right - I accept that I was not unambiguous enough.
I.e. Pssst, Back On Topic Please didn’t work.

Any posts that contain jibes at others have now
been removed so that the thread is on topic.
The same goes for responses to those jibes.

Trading character observations about forumites
who are posting to this thread is not On Topic.
Confine any such stuff to PMs. Or off-site.

This matter has vexed and tried the Mods. Ya’ll
need to really appreciate that we’re volunteers;
people who have other lives to lead, away from
the PT Forums. Say after me:

I believe in staying on topic . . . for ever and ever,
ah well.

The thread is now unlocked: come through the
door, treading carefully.

Perry
PT Moderator

[Xav]

Presuming that article is accurate (which from a Companies Office search it appears to be) then it appears she is personally liable for the debts of the company under the Pheonix Company provisions. That is probably of cold comfort though, given that the shares in the new company are held by her family trust, presumably together with her other assets.

The liquidator's report does not identify the secured creditor(s). Given the company didn't own any assets it is odd to have a secured creditor. I would not be at all surprised if the secured creditor is an associated entity. The family trust may have taken a security interest to secure advances made to the company.

Edit:

Spaceman, I agree in part with your comment. When these threads pop up from time to time it is often interesting contrasting a user's posts with his/her posts in threads asking for advice re structures.

However this kind of scenario does rub me the wrong way. It is one thing for someone to use a structure to ensure that a business failure will not affect his/her other business interests or personal assets. It is quite another to use that structure to (effectively) extinguish a debt and then continue on as if nothing happened. That shows a lack of integrity in my opinion.

[spaceman]

Hmmmm ....

..... I believe that any assets placed in a trust that are deemed to have been placed there, by a judge, in order to defeat creditors can be removed from the trust by said judge........ so if their is any obvious funny busniess going on here then it might not be a matter of cold comfort at all.

As for being rubbed up the wrong way....... I agree.... I'm uncomfortable with the fact that dodgey players can hide behind the limited liability protection of a company..... but the fact of the matter is that it is there and while the intent is to allow people to go into business without having to put everything on the line, unfortunately it can provide an easy out for the ratbags........ the tricky part is where to draw the line so that entrepreneurs are encouraged and ratbags are held to account, I personaly think it's weighted a bit too much in favour of the ratbags at the moment.... especially the ratbags with good lawyers.

Cheers
Spaceman

[PeterEmpowerEd]

Standing up for Sue Tierney

I want to stick up for Sue Tierney. I’m not speaking on her behalf, just my own. As usual.

I can speak from first-hand experience in saying that civil litigation is a very expensive process ... fraught with stress and difficult compromise.
Whether you think you’re in the right or not, litigation is a gamble, often involving strategy and brinksmanship, and the outcome is almost always uncertain.

Again, in my own observation, sometimes the personalities involved in litigation (clients and lawyers) can work against reaching a compromise ... and disputes can go further than they probably should.

Disagreements that could have (maybe should have) been settled instead end up getting their own momentum -- going “all the way” because of ego or because someone is locked into an unrealistic position. (The same thing happens in property deals.)

On top of that, many of us know the outcome of the justice system can sometimes be a considerable distance from justice (the law can be an ass) -- especially when it comes to civil litigation or employment grievance-type matters.

I spoke to Sue about this on Tuesday (am I the only poster in this thread who has done so?) and my mind is at rest. I won’t say anything more about that conversation except this: Sue is not one to take such serious decisions lightly (just the opposite) -- nor to act without competent, informed legal advice.

I like and I trust Sue Tierney. I’ll stand up for her and I'll stand beside her.

[donna]

It seems like a lot of fallout for $70K in my opinion. Why not just pay out per the court's decision? The Director can loan the company the $$ to pay the mortgage broker as per the court decision....and the issue goes away.

Okay so the worst that happens is your business never pays back your $70K - it's all relative isn't it? With the business doing very well over the years - and got the Mortgage Broker of the Year etc once or twice the $70K really is pocket change isn't it?

Just a thought.

Cheers,

Donna

[spaceman]

ummm.....isn't it more like half a million?????

Cheers
Spaceman

[PeterEmpowerEd]

The reason I've tried to explain something of the ghastly stress and challenge one faces in litigation is because I think to understand this 'controversial' liquidation it needs to be seen in the context of the exhausting, drawn-out, shouldn't-have-got-this-far legal/employment dispute.

In my personal view until one has faced a wasteful, wearying legal battle like that (as I have), I don't think one's 'criticism' of someone who has holds a lot of weight. It's akin to chatter on the sidelines, or theory vs practice.

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.
The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

Theodore Roosevelt, from "The Man In The Arena" Speech at the Sorbonne, Paris, France - April 23, 1910