Former Blue Chip boss Mark Bryers returns to the witness box today, having faced a day of questions on his management of the failed property investment company and related party lending, as the High Court continues its look at his application for discharge from bankruptcy.
Bryers was judged bankrupt in October 2009 owing $230 million. Typically bankruptcies last for three years and his lawyer David Chisholm said Bryers had already served an extra 2 years because of delays in getting the hearing.
"For a first-time bankrupt, he's the first to have an extension of his bankruptcy for such a long time."
The Official Assignee is seeking conditions on his discharge from bankruptcy, including banning him indefinitely from owning and operating a business in New Zealand.
The Blue Chip group of companies failed in 2008 owing $84 million to more than 2000 investors.
Most of Bryers' assets were held in family trusts and he told the court the banks required him to provide a personal guarantee as a director of the various special-purpose property companies despite the assets of those companies being trust-owned.
"You can't get a loan in New Zealand without that," he said.
It was those guarantees to commercial lenders that are said to have led directly to his bankruptcy.
Bryers and his family interests held a 61 per cent stake in Blue Chip in 2005, but that had been whittled down to just 3 per cent at the time of his bankruptcy. He told the court that once the company had co-listed on the Australian stock exchange in 2006 the listing rules required him to continue to reduce his holding.
"Most of the wealth accumulated by my family trusts over time, despite what the media says, had very little or nothing to do with the public company."
Bryers admitted 34 financial reporting charges in May 2010 and was fined $37,500 and ordered to do 75 hours of community work. The charges didn't relate directly to the firm's failure, but the judge described Bryers as utterly failing in his obligations as a company director.
Phillip Cornege, the lawyer acting for the Official Assignee, yesterday questioned Bryers over cash-flow difficulties and related-party lending within the Blue Chip group, in an apparent attempt to demonstrate why he shouldn't be allowed to run a company here in future.
Bryers put much of the blame for the cash-flow difficulties on alleged incorrect accounting by the group's former financial officer and a change in accounting treatment for property development income.
Since 2007 Bryers has been living in Australia and told the court yesterday that he had no intention of returning to live here, describing this as his "last visit to New Zealand". He had lost a bid to avoid appearing in person at the High Court hearing, which is expected to wrap up today.
Until last August Bryers, under the alias Mark Ryan, worked for Australian firm Talos Accounting Group. The court was told he was a strategic consultant to Talos.