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SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

David Ian Henderson – Property Ventures Ltd (In Liq.) and role of Liquidator

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David Ian Henderson is a twice bankrupt Christchurch property developer whose Group of companies – Property Ventures Ltd [“PVL”]- were placed in liquidation on 27 July 2010. On 9 June 2014 Mr Henderson will be examined as a current bankrupt before the High Court to give account of his various activities while subject to the bankruptcy order (Note: It is unlawful for a current bankrupt to play any role in the management, directing or promoting of a company).

One of the tasks of a Liquidator nominated by the Commissioner of Inland Revenue and appointed by the High Court to liquidate a large Group of companies such as PVL, is to try and determine whether or not a director(s) of the Group has committed any offence(s) under the Companies Act 1993, the Insolvency Act 2006, The Securities Act,  the Tax Administration Act 1994, or the Financial Reporting Act 1993 etc., and report any breach(es) to the Registrar of Companies.

The task of unravelling the often convoluted network of company subsidiaries and related companies within such a Group can be a daunting one for any Liquidator, as illustrated in the example below – involving ongoing litigation initiated by the Liquidator against David Ian Henderson (and his companies) because he has allegedly failed for some years to provide the required documentation to him the liquidator to complete his statutory duties. Liquidators have a statutory right under s. 261 of the Companies Act 1993 to demand financial records, records of company related correspondence etc. from a company director. Failure to provide it in response to a formal request is an offence and if  convicted, the director “is liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years” under s. 373(3) of the Act.

The liquidator has reported that a proliferation of companies were used by Henderson to “thwart liquidators,” by liberally using cross-guarantees to muddle the affairs of various entities.

Property Ventures Ltd (In liquidation) – Unravelling a complex “single economic unit”  [Read more…]

David Ian Henderson: Bankrupt Christchurch property developer v. the Insolvency and Trustee Services

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Introduction

Liquidation is a process where the assets of a company that cannot pay its debts, are distributed by a liquidator or by a Crown authority called the Official Assignee (AO). The AO only deals with liquidations where it has been appointed liquidator by the court or, in certain circumstances, by itself. A company is placed into liquidation when it is unable to pay its debts. This is done voluntarily or by a court order. A liquidator is appointed to investigate the company’s financial affairs, establish the reason why the company failed, investigate possible offences, and identify and sell any assets to help repay creditors. Officers of the company must assist the liquidator by providing information and answering questions. 

Failure to assist the Official Assignee is a serious offence and may lead to prosecution. It is an offence for a director to conceal or remove property with the intention of preventing or delaying the Official Assignee from taking custody of it, or to destroy, conceal or remove records or other documents. Penalties can include fines and imprisonment.

Bankruptcies are managed by the AO and normally last for three years. Bankrupts are unable to direct a company and are not allowed to manage a business without the OA’s consent. [Source: http://www.insolvency.govt.nz/]

The Society for Promotion of Community Standards Inc. is concerned that the ability of liquidators serious about fulfilling their statutory duties to investigate and report possible offences by company officials against the Companies Act 1993, the Financial Reporting Act, the Securities Act and the Insolvency Act 2006; are being undermined and thwarted by a number factors including: [Read more…]

David Ian Henderson – a two-time bankrupt accuses Liquidator of conduct breaches

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David (Dave) Ian Henderson, twice-bankrupt high-profile Christchurch property developer, and his business associate Ian Bruce Hyndman, appear to have been behind a Notice in the National Business Review (NBR) and one in the NZ Herald (22/05/13) that ran last year, apparently seeking “information” on chartered accountant Robert Bruce Walker, liquidator of Property Ventures Ltd (in receivership and liquidation), the parent company of interconnected companies owned or controlled by Henderson. Henderson was behind the failed $2 billion Five Mile town development at State Highway 6, Queenstown, near the Queenstown Events Centre, colloquially known as “Hendo’s Hole.

As sailors know, it is important at sea to avoid peeing to windward. The blow back can be very unpleasant. So can the result of trying to gather ‘dirt’ and throw it at a person and make it stick, when a very strong gale is opposing the thrower.

Dave Henderson who was bankrupted in 1996 and discharged in 1999, was then bankrupted again on November 29, 2010, the latter one of the largest bankruptcies in New Zealand’s history. By his own account he had gross personal debts of about $165m and $86m after the sale of secured assets. The debts come mainly from personal guarantees he had given on loans to his companies.

Bankruptcies are managed by a Crown authority called the Official Assignee (OA) and normally last for three years. Henderson remains an undischarged bankrupt because the OA filed a notice of objection to Mr Henderson’s discharge, pursuant to s 292 of the Insolvency Act 2006, on 28 November 2013. The OA “strongly suspects that Mr Henderson had entered into, carried on, or taken part in the management or control of businesses during his bankruptcy, contrary to s 149 of the Act. Mr Henderson strongly refutes the Assignee’s suspicions…” (quoted from High Court judgment dated 18 March 2014 – CIV-2010-409-000559 [2014] NZHC 499). [Read more…]