Matt Nippert is a business investigations journalist.

'Risky' businessman free to trade again

Bankruptcies typically expire after three years, but the Official Assignee has the power to request extensions.
Bankruptcies typically expire after three years, but the Official Assignee has the power to request extensions.

A Hamilton man whose "lax management" and "poor business judgement" was described by a High Court judge as still representing a risk to the community has been discharged from bankruptcy.

Stephen John O'Brien, a property manager, had been bankrupted owing $1.2 million in 2010 regarding a failed development in Auckland.

A ruling published this week shows the High Court at Hamilton heard arguments from the Official Assignee (OA) in June that O'Brien's conduct and behaviour meant he should not be discharged, despite his bankruptcy having already been extended to six years.

Bankruptcies typically expire after three years, but the Official Assignee has the power to request extensions.

Associate Judge Jeremy Doogue heard O'Brien had set up bank accounts to maintain control and operation of his business ahead of his bankruptcy, and despite a series of claims during the coming years to be working for others, these were ruled to be ruses constructed by him to disguise his control.

The accounts, containing $43,000 were later seized, and O'Brien in 2015 pleaded guilty to charges of running a business while bankrupt and concealing assets.

Associate Judge Doogue noted while O'Brien submitted on a number of times he's requested permission from the OA to operate the business "he does not actually assert that permission was granted to him."

Associate Judge Doogue agreed with the OA that O'Brien's conduct was problematic.

"I consider that Mr O'Brien does pose a future risk to the community. Such a risk could derive from generally lax management and poor business judgement."

In declining the OA's request to extend bankruptcy further, Associate Judge Doogue said he had to take into account the long stretch of bankruptcy O'Brien had already served and hardship he would face it was extended still further.

"It is to be inferred that continuation of the bankruptcy in the case of Mr O'Brien, who is now aged 65 years and not in good heart financially, will cause hardship to him. Given Mr O'Brien's background, he is unlikely to be viewed as an attractive candidate for employment," the judge said.

- NZ Herald

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