Court ruled against Ian Fistonich over debts. Photo / NZME
Court ruled against Ian Fistonich over debts. Photo / NZME
An Auckland property developer who offered to pay creditors $250/week over five years has had the High Court at Auckland approve repayment arrangements.
Associate Judge Clive Taylor ruled on the repayment scheme from Ian George Fistonich, formerly of West Auckland builder Accent On Construction.
The court approved a scheme putforward by trustees to repay a debt that one lawyer told the court was more than $2 million.
Creditors Calypso No 11 and Praxis applied to bankrupt him but the judge said the public interest in having Fistonich adjudged bankrupt - if there was any - was not a reason to refuse the proposal being put to creditors.
Fistonich owned and directed several companies which went into liquidation and receivership in December 2018, the judge noted.
The developer settled individually with several creditors but in late 2021, Calypso and Praxis started bankruptcy proceedings against him, the judge said in the February 8 decision.
A director of Praxis and its owner is Loukas Petrou, of Canam Construction. Asked after the hearing what the debt was over, Petrou said it was for a Central Park Dr building in Henderson where rent was owed.
The debt underlying the High Court proceedings arose out of a District Court judgment companies got for arrears owing under a lease entered into by Accent and guaranteed by Fistonich.
Fistonich had proposed a deal with his creditors that would have seen him repay $250/week over five years.
Caroline and Loukas Petrou. Photo / Norrie Montgomery
The judge heard arguments against him repaying that amount because it didn’t come close to clearing what was claimed.
The proposal provides for $250/week for five years, which totals $65,000. Yet the total creditors’ claims were $2,077,608.59, so the weekly payment amounted to a dividend of only 3.13 per cent, the judge heard.
Lawyer Daniel Grove argued against that amount being repaid. He submitted that there was public interest in Fistonich being adjudicated bankrupt.
Fistonich owned and directed several companies which operated under the Accent on Construction brand, Grove noted.
In December 2018, those Accent companies were placed into liquidation and receivership.
Grove submitted that no explanation had been given by Fistonich as to the “multimillion hole in the finances” of the Accent group, discovered in June 2017.
That hole clearly led to the guarantees being called up and to Fistonich’s insolvency. There were therefore good grounds for concluding there was a public interest in investigating what happened, whether any relief was available and to ensure it does not occur again, Grove told the judge.
But Nicholas Coyle representing Fistonich argued his client was employed and there was no evidence he was a commercial hazard. He rejected suggestions of some form of misconduct and said there was no evidence of claims against him by the liquidators of Accent and no suggestion he had not made full asset disclosure.
Coyle cited litigation Fistonich had planned against an entity associated with Graeme Halse of the firm Foy & Halse. Fistonich planned to take action against Halse and related entities including Premier LP, alleging breach of fiduciary duty, breach of contract and negligence.
That litigation related to mortgages Halse’s entities had over a property owned by the Zlato Trust, associated with Fistonich.
The financial outcome of that litigation could also be used to repay creditors, the court heard.
The judge said: “The creditors have reached the view that there is a potential advantage to them in approving the proposal and possible upside if the Halse litigation is successful. In this instance, it is not for the court to override the views of the creditors in respect to the risk of whether or not the Halse litigation will be successful, and therefore, this is not a sufficient ground for the court to refuse approval of the proposal.”
