Bankrupt Bryers needs to get back on his feet, lawyer in discharge hearing says
Mark Bryers, bankrupted in 2009 owing $230 million, is running out of time to get back on his feet, his lawyer told a High Court hearing seeking to discharge the former boss of Blue Chip.
Associate Judge Jeremy Doogue reserved his decision at the end of a two-day application by Mark Bryers for discharge from his 5 1/2-year bankruptcy. His lawyer, David Chisholm, QC, said 57-year-old Bryers was at an age where he needed to re-establish himself.
"He needs to get back on his feet again, before it's too late," Chisholm told the court.
The court was told Bryers' debts were unrelated to Blue Chip's 2011 collapse, and were a result of personal guarantees he had made to financiers for third-party property developments and to Mide, the New Zealand franchisee of Australian-based Blue Chip Financial Solutions (later Northern Crest) which were never pursued by the parent company.
The Official Assignee backed down on his original submission for the former Blue Chip boss to have an indefinite banning order from running a company in New Zealand. In his closing submissions to the High Court at Auckland, Phillip Cornege, acting for the Official Assignee, said it was up to the court what further sanctions it imposed on Bryers, given the lengthy nature of his bankruptcy beyond the normal three-year term.
During the hearing Cornege accused Bryers of contrivance in his role as a strategic consultant to Australian company, Talos Accounting Group, when he was, in fact, pulling the strings in the background and playing a managerial role.
Bryers denied the accusation and had the support of two witnesses and long-time associates Lawrence Eakin and Robert Hughes. Eakin is a former executive director of Northern Crest (formerly Blue Chip) and both men have been involved in running Talos.
Cornege said Bryers' behaviour in Australia didn't amount to a breach of New Zealand law because it fell outside of the Official Assignee's jurisdiction. But he said it was a potential breach of a section of Australia's Corporations Act which stops undischarged bankrupts from any country managing corporations or making or participating in decisions that affect the whole or a substantial part of a corporation.
Bryers had permission from the Official Assignee to live in Australia where he's been since 2007.
Cornege said it was up to regulator, the Australian Securities and Investment Commission, to decide whether to pursue action over the potential breach but he told the judge that Bryers' conduct should be taken into consideration by the court, either in terms of his potential post-adjudication conduct or in terms of commercial morality.
The usual term for first-time bankrupts is three years and Chisholm said Bryers had already served longer than he should have because the Official Assignee had "sat on his hands" for two years in calling a public examination. That's despite Bryers crossing the Tasman several times at the Official Assignee's request.
Chisholm said the Official Assignee had also failed to produce sworn evidence that proved Bryers was more than a consultant to Talos.
He said while there was concern Bryers could put the New Zealand business community at risk if discharged, he argued most people had heard of him and would, therefore, make their own decisions on doing business with him.
The associate judge said that depended on whether he was operating under his own name but Chisholm said Bryers had used the alias Mark Ryan only while working for Talos and at that company's request because of concern over negative feedback from his Blue Chip association, where some 2,000 investors were left $84 million out of pocket.
A handful of people turned up in the public gallery on the second day of the hearing including one older woman who made a gagging gesture when Bryers spoke.
Chisholm said the court also needed to be careful about making subjective judgements on commercial morality, particularly given the sworn evidence given by Bryers, Eakin and Hughes.
Bryers told the court this would be his last visit to New Zealand as he had no intention of living here again.
Talos Accounting Group has acquired around 10 provincial and suburban accountancy firms so far as part of its bid to reach a sufficient size to list on the Australian Stock Exchange.
Bryers works for Foresight Marketing which has a number of past and current directors and shareholders who are involved with Talos and it shares the same office address in Sydney.
He said he had been involved in Talos since its inception in 2012 and before he was hired by Foresight. But he denied that emails and company organisational charts naming him as manager meant that he was making the final decisions or managing staff.
Bryers said he also acted as a consultant for four other clients but the associate judge placed a temporary suppression order on naming them after Bryers said he was concerned publicity could have a negative impact as it had done with Talos.
Cornege questioned Bryers over an email that indicated he was paid $300,000 for his role at Talos. Bryers told the court Foresight charged $160,000 for his consultancy work of which $60,000 related to Talos. A 20 per cent cut went to Foresight shareholder Anderson Vago and the remaining $132,000 was paid to him.