Blue Chip founder free to take business to Australia

Mark Bryers. Photo / Herald on Sunday

Blue Chip co-founder Mark Bryers is free to move his business to Australia after a failed attempt by New Zealand officials to have the Blue Chip parent company wound up.

In the High Court at Auckland yesterday, Justice Anthony Christiansen said "much more harm" would result if he granted the Registrar of Companies' application to have Northern Crest Investments liquidated.

This was after Blue Chip liquidator Jeff Meltzer, in charge of handling the winding up of more than 20 companies in the failed property investment group, told the court he supported a plan Northern Crest's new directors had come up with to help Blue Chip victims.

Northern Crest Investments, formerly Blue Chip Financial Solutions, changed its name after the group collapsed early last year. It is listed on the Australian Stock Exchange, but trading in its shares has been suspended since the collapse.

In some hastily prepared accounts for the 2009 financial year, filed on Friday, the New Zealand-registered company says it plans to migrate to Australia, where Mr Bryers has been operating a property business.

The Registrar of Companies applied in February to have Northern Crest wound up, saying it hadn't filed up-to-date financial records and was insolvent.

A month ago, the company produced a set of accounts for the 2008 financial year.

Two weeks ago, Mr Bryers resigned as the company's sole director - although he remains a major shareholder - and on Friday, it filed 2009 accounts and issued a press release saying it had developed a scheme "to assist former New Zealand clients of the collapsed NZ franchisee".

Northern Crest's 2008 accounts show a loss of $125 million.

The latest accounts show it made a $54,000 loss this year, although it was not trading.

The lawyer for the Registrar of Companies, Mark Woolford, told the court that the firm's only assets were about $4 million in advances to other companies in the Blue Chip group.

Its latest balance sheet shows it had liabilities of $1.8 million.

But it was unlikely this money could be recovered, and Northern Crest was able to keep operating only because of the forbearance of its creditors.

"The company is clearly unable to meet its debts as they fall due."

Mr Woolford said that in the latest accounts there were five pages of assumptions that would all have to occur for the company to be a going concern. "It's like a house of cards - take out one and it falls over."

He said the auditors of the 2008 accounts had been unable to determine if the accounts were accurate, and the 2009 accounts relied on the platform of the 2008 documents, "which isn't a platform".

But Northern Crest's lawyer, Nathan Gedye, said much had changed since February, and Mr Bryers' sole directorship was only ever intended to be temporary.

The three new directors were not relying on collecting money owed by related companies, and had said Northern Crest would settle its remaining liabilities by the end of this month.

Its creditors did not want the company wound up, and a liquidation would mean more than 2000 shareholders would lose their investments. "The court is confronted with massive, certain losses if a winding up order is made."

Mr Gedye said the scheme for helping Blue Chip victims involved establishing unit trusts, with the New Zealand liquidators as trustees.

Justice Christiansen said the Registrar of Companies had good reasons for his concern, particularly as Mr Bryers had been Northern Crest's sole director and a major debtor of it.

But he had now resigned and control of the company "lies with persons who appear well qualified".

It had come up with the outstanding accounts and any deficiencies could be dealt with by the registrar.

He also said he had confidence in Australia's regulatory authorities.