Franchisor faces 100 criminal charges

February 23, 2009

bryers2Blue Chip was set up as a franchise by Mark Bryers.

Business format franchising is very useful in insulating owners from liability. One type of liability is when people, downstream, sue the corporation because of its alleged fraudulent dealings. Bryers set up +160 companies.

  • Not many kiwi real estate investors are smiling as much as  Bryers, a disbarred lawyer left, appears to be these days while biding his time in sunny Australia.

The New Zealand Herald and Jared Savage report on the latest attempts to bring Bryers to justice (Blue Chip founder faces 100 charges).

Criminal charges have been laid against Blue Chip co-founder Mark Bryers for his part in the property company’s $80 million collapse.

More than 100 charges have been laid against Bryers for alleged breaches of the Companies Act.

They follow a six-month inquiry ordered by the Registrar of Companies.

Bryers is living in Sydney, Australia running a similar type of real estate company. The Serious Fraud Office and Commerce Commission are also investigating.

To Recap:

More than 2,000 investors are out of pocket after 22 Blue Chip-related companies owing more than $80 million were put into liquidation last year.

Many investors are retired and face losing their homes.

About the only person working to try to recover any investor money is…

Paul Dale, an Auckland lawyer acting for many of the investors, said he was not surprised charges had been laid.

He welcomed the prosecution, but called on the Government to bail out those who stood to lose everything because of the Blue Chip collapse.

In a related story called Mark Bryers still gets rent cash, Rebecca Milne quotes a  67 year-old who as saying it’s too late for her and her 72 year-old husband:

“We’ve been to the doctor more in the last 12 months than we’ve ever been in our lives. We’re just so stressed about it all.

“We’ve already sold our home. We’re in a one-bedroom council flat. That’s all we’ve got.”

The New Zealand government has yet to explain how such a large-scale fraud could occur, let alone take steps to prevent it in the future.

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kiwi Lenders in jail? There is a Santa Claus.

December 23, 2008

petricevicExecutives from 2 failed New Zealand  finance companies are being charged with criminal offenses.

Maria Slade and The New Zealand Herald report in Criminal charges for 9 finance firm chiefs that the Securities Commission and the Registrar of Companies allege:

…Bridgecorp staff were told to lie to investors who complained about late interest payments by blaming a bank error or computer glitch.

It says the finance company was so short of money that in April 2007, three months before it collapsed, it had only $45,000 available to meet $2 million in payments due to investors.

Also:

The Securities Commission alleges the Nathans Finance directors signed untrue statements saying the company had no bad debts, had adequate liquidity, that its lending was diversified, and that it made loans in accordance with robust policies.

It says they misled investors over Nathans’ lending to its parent company, vending machine operator VTL which is also now in receivership.

Names and Potential Outcomes

Bridgecorp: Former executive director Rod Petricevic and director Rob Roest already face five criminal charges, and now also face civil proceedings. Chairman Bruce Davidson and non-executive directors Gary Urwin and Peter Steigrad are now charged alongside Petricevic and Roest. Bridgecorp owes $459 million to 14,300 investors; they could get back as little as 13c in the dollar. Bridgecorp Investments owes $29 million which is unlikely to be recovered.

Nathans Finance: Directors John Hotchin, Donald Young and Kenneth Moses face criminal and civil proceedings. A fourth Nathans director believed to be living in Australia is also charged. Nathans Finance owes $174 million to 7000 investors; less than 10 per cent is expected to be recovered.

Penalties: Up to five years in jail or fines of up to $300,000 if convicted of criminal charges. $500,000 each in compensation payments.

This is a follow up to my May posting called 90 yr old faces losing house over Blue Chip:

Mrs. Gwendoline Harrison, a New Zealand pensioner was served with legal papers at her bedside this week. It involves the collection of a $300,000 mortgage that the franchise company, Blue Chip, sold her.

Bridgecorp directors Rod Petricevic (left) and Rob Roest are in the photo above, care of Richard Robinson.


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