Update on Inquiry into Funding of NZ Porn Industry: On 13th June 2012 the second Liquidator’s Report on Eden Digital Limited (In Liq) was issued (It was put into liquidation on 22/11/11 and was directed by American businessman John M Carr CPA from 23/04/08 to 13/09/11). [ Photo of John M Carr http://www.carr.co.nz/images/jmc.jpg ]
The Report revealed that one preferential creditor – (the IRD) has filed a claim in liquidation for $171,792 [for unpaid GST & PAYE]. Based on the first (earlier) Liquidation Report, the company’s employees, who constitute another class of preferential creditors, are owed $20,000 in wages. The latest report shows that seven non-preferential (unsecured) creditors, have filed claims in liquidation for $183,901. This brings the total owed by Eden Digital Ltd to these creditors, to $355,693. An additional several thousands of dollars will probably be claimed by Grant Bruce Reynolds, the Liquidator, of Reynolds & Associates Ltd, (Insolvency Practitioners), for his fees and expenses, and these costs must be paid in advance of all other payments to preferential creditors.
It is unlikely that any of the unsecured creditors will receive anything after all the secured creditors are finally paid out. The latter include the shareholder CVC Group Ltd, directed by John M Carr CPA and holder of all 150,000 company shares in Eden Digital Ltd; Vision Rentals Ltd, Solutions Group Receivables, Konica Minolta Business Solutions and Harper Collins Publishers.
Eden Digital Ltd, which was incorporated on 23rd April 2008, held the licence for Erotica Lifestyles Expo until 16 September 2011 (as reported in the Waikato Times) – the day John M Carr CPA resigned as director of Eden Digital Ltd and appointed Raymond Sydney Corben Simpson of Mt Eden, Auckland, as its sole director. On that same day the Expo licence owner, CVC Group Ltd, directed by John M Carr, withdrew the licence from the licencee Eden Digital Ltd, also directed by John M Carr. (CVC Group Ltd owns Eden Digital Ltd and both have John M Carr as sole director).
Although Eden Digital Ltd was technically put into liquidation on “by special resolution of the shareholders”, under ‘the watch’ of Mr Raymond Simpson on 22nd November 2011; this action was necessitated as a result of a financial collapse that occurred under the sole ‘watch’/directorship of John M Carr.
It would appear that Eden Digital Ltd must have been trading whilst insolvent and had not been paying tax for many months – prior to Mr Simpson being appointed as director – a state of affairs that occurred under the directorship of John M Carr – [ Note again!: he was director from 23 April 2008 to 16 September 2011. More importantly he was sole director from 15 May 2010 to 13 September 2010].
Having abandoned the directorship of Eden Digital Ltd on 16 September 2011, Mr John M Carr’s next move was to incorporate the company Esprit Events Ltd, of which he is sole director, a company also owned by CVC Group Ltd. Esprit Events Ltd purchased the Erotica Lifestyles Expo licence from CVC Group Ltd, a company of which he (Carr) is also sole director. CVC Group Ltd wholly owns both Eden Digital Ltd and Esprit Events Ltd.
Eden Digital Ltd was the licensee of Erotica Expo Expo and the transfer of the licence to a related party, Esprit Events Ltd, could hardly be seen as a significant or complex financial transaction. Director John M Carr merely obtained the licence from himself and then gave it to back himself, then returned it to himself, to put it crudely. Such a ‘transaction’ did not require a large contingent of lawyers from Checketts McKay Law firm in Cromwell or a consignment of Adult Services handmaidens to effect the ‘complex’ financial ownership transmutation. It was not exactly the ‘sale of the century’.
Having now obtained the financial records of Eden Digital Ltd, Grant Bruce Reynolds, the Liquidator, has indicated that he will be focusing his investigation into Mr John M Carr’s activities as director: specifically on “any potential breaches under the Companies Act,” and on any possible voidable preferences”. He will also be “Reviewing the sale of the business [Erotica Lifestyles Expo/Eden Digital Ltd] to a related party [Esprit Events Ltd] pre liquidation including obtaining advice on the validity of the sale and whether or not adequate consideration was given by the Purchaser for the business.”
Among the 22 unsecured creditors of Eden Digital Ltd listed in the First Liquidation Report filed on 23 November 2011, are PJ Digital Ltd and the US-registered corporation Better Business Services, Inc. [see note below] both owned and directed by John M Carr; NZX Media Ltd and Ezisoft Computer Systems Ltd, both directed by David Bruce Crow; ASB Showgrounds which has provided the venue for a number of successive Erotica Lifestyle Expos; IRD (penalties and interest for unpaid tax), and ACC (unpaid ACC levies).
Note: Better Business Services, Inc., also referred to as BBS Inc, was incorporated in San Antonio, Texas, on November 11th, 1983, and was authorised under Texas Charter number 67876000 to carry out defined business activities in Texas, including those carried out in a certified public accountancy practice (tax returns, bookkeeping, payroll etc). John M Carr CPA is director, president and registered agent of Better Business Services, Inc. an unsecured creditor of the NZ-registered company Eden Digital Ltd (In Liq). On 6th September 1984 under charter number P03291 BBS, Inc. was authorised to do similar business in Florida.
References:
Expo claim ‘bollocks’ By Daniel Adams. 29 November 2011
http://www.stuff.co.nz/waikato-times/news/6053216/Expo-claim-bollocks
Companies Office website: www.companies.govt.nz
Porn Kingdom asset sale to be questioned. National Business Review. 8 July 2009. By Lucy Craymer.
http://www.nbr.co.nz/article/porn-kingdom-asset-sale-be-questioned-105061
