Thursday 9th August 2018
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The High Court has backed the liquidator of Ross Asset Management in divvying up $17.5 million among 665 investors and creditors on the same terms, much to the chagrin of the investor support group.
In the High Court in Wellington, Associate Judge Kenneth Johnston yesterday made a series of orders on how to distribute the funds held in two separate entities, settling on the proposition put forward by liquidators John Fisk and David Bridgman of PwC ranking investors and unsecured creditors equally and treating the Ross group entities as one pool of assets.
Some investors sought to have the assets distributed under a different model, and while Judge Johnston said there was "very little in it" he settled on the liquidator's recommendation because it was "the one that achieves the least unfair result for the largest number of claimants."
Ross Asset Management Investors Group spokesman Bruce Tichbon said the judgment "defies common sense and fairness" by rejecting other methodologies. He claimed the alternative model would have reduced the disparity between investors.
The Ross group of companies fell apart in late 2012 when it became clear principal David Ross had established a massive Ponzi scheme, largely through word of mouth referrals. Between 2000 and 2012 he reported false profits of $351 million from fictitious securities trading in what's still the country's biggest fraud committed by an individual.
In reality, the $125 million of real funds were frittered away before it ultimately collapsed. Ross is still serving his 10 year, 10 month jail term.
The judgment said of the 860 Ross Asset investors, there were 639 deemed to be shortfall investors who withdrew less than they invested collectively claiming $124.7 million. Another 26 people were unsecured creditors owed about $68,000.
The balance of investors withdrew more than they put in and have been pursued by the liquidators. In Fisk and Bridgman's latest report, released last month, they said 182 people had settled with the liquidators for a total of $19.1 million and that 21 claims remained. Of those, 13 had legal proceedings filed against them.
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