Friday 23rd August 2019
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Liquidators for Denton Morrell are in talks with parties to pick up parts of the defunct firm’s client, as more information about its liquidation can be made public.
PwC’s John Fisk and Lara Bennett were appointed to the company on July 19 after the death of its director Matthew Butterfield.
While companies are more commonly moved into liquidation based on their inability to pay debt, Denton Morrell was put into liquidation on the basis that a company cannot exist without a director.
At the time of liquidation Denton Morrell, which was the subject of an AML warning earlier this year, was associated with 600 entities, of which 50 were in New Zealand. The firm provided trust services, largely to overseas entities, and it claimed to be a steward for more than US$15 billion of various assets.
Bennett told BusinessDesk that clients are being advised on what happens if their business is sold to others. The liquidator said there is interest in parts of the business, and it was unlikely to be sold as a whole. She would not comment further, citing confidentiality.
Meanwhile, a High Court judge has granted BusinessDesk access to the court file on the liquidation, which describes Butterfield’s death as sudden and unexpected. His family is asking for privacy at this time.
According to an affidavit on the file, Butterfield’s brother-in-law Israel Vaealiki says his sister, widow Sarah May Elise Butterfield, believed her husband was going to change his will, and so representatives are advertising to find out if there was a new one.
Before the liquidation, PwC was asked to undertake some initial investigations into the company and according to the evidence of Bennett, there were two employees.
The liquidators concluded that Denton Morrell was probably insolvent.
Its last financial statement recorded was in March 2016, and bank accounts closed in September and October 2018 continued to show balances in the company accounts, the evidence said.
Employees had only been paid up to May 31 this year, while “correspondence indicates non-payment or overdue status including for insurance premiums,” the affidavits said
At a hearing on June 28, the lawyer for the companies registrar, Lucy Deane, told associate judge Warwick Smith that there were concerns the business might be sold
“I take from that that the assets might be depleted or the positions of the defendants worsened as far as the positions of any creditors are concerned,” the judge wrote in a note.
After the companies were moved into liquidation, receivers were also appointed, although their validity is disputed by the liquidator, Bennett confirmed.
Companies records state on July 25 Richard Lawrence and Richard Albarran of Hall Chadwick in Australia were appointed receivers.
Receivers cite a security agreement from Aug. 20, 2016 between Denton Morrell and Uluwatu Investments underpinning their appointment. Uluwatu Investment is a Singapore registered company linked to Australian entrepreneur James Cotton.
However, the liquidator says the debt was between Uluwatu and Butterfield personally, so the appointment is invalid.
An email to the receiver went unanswered.
Denton Morrell was outed by Radio NZ as a company suspected of involvement with a worldwide network of companies and assets connected to the families of Azerbaijan leaders.
Following its liquidation, the Department of Internal Affairs said it had not yet taken further action against Denton Morrell following the warning but was working with its legal representatives to “resolve the matter.”
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