miket12
🏛️
In the early 90’s, I did contract work for a small residential building company which went under. The two directors/shareholders were a husband and wife and their accountant was their son-in-law.
18 months before the company went into liquidation, it built a house for their daughter and son-in-law (the accountant). The company gave them a loan, which they had interest only on.
Three weeks before the company went into liquidation, the directors decided the loan wasn’t recoverable and wrote it off, so it was no longer an asset the liquidators could go after.
The liquidators took the shareholders to court for trading while insolvent and the accountant to try and recover the loan. The directors couldn’t be touched because their house was in a trust and the accountant wasn’t required to pay back the loan and kept the house.
For us creditors, that meant that we got paid 12 cents in the dollar instead of over 70 cents in the dollar.
To make things worse, the owners of the business had a fencing contractor finish off fencing to four properties on a weekend…. even though he’d arranged for the liquidators to come 8 o’clock Monday morning and knew the contractor wouldn’t get paid.
Both Placemakers and Carters had received preferential Payments over other creditors and just told the liquidators to take them to court to try and recover the amounts knowing it would have used up all the remaining cash for the other creditors.
Pisses me off that successive governments set the rules to make sure they (the IRD) are seen as being secured creditors at the expense of unsecured ones.
