Bankrupt’s ban continues

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Queenstowners still angry over dealings with notorious developer Rod Nielsen applaud the extension of his bankruptcy.

Local Wayne Gore, who had an unsuccessful legal battle with Nielsen over the latter’s Sicilian Estates development, says: “I don’t think he should ever be able to operate a company again.

“Nielsen’s burnt a lot of people. If directors repeatedly disregard commercial responsibilities they should pay for the consequences.”

Agg­rieved local Fred Bramwell adds: “Nielsen isn’t needed in the marketplace. What he’s done is sly stuff.”

The former Queens­­­­town dev­­eloper will remain a commercial leper until November 2015, after Justice Geoffrey Venning refused to dis­charge Nielsen from bankruptcy.

According to last week’s judg­­­ement in the High Court in Auckland, a pictured emerged that Nielsen “took a cavalier attitude” to bankruptcy and extending his ban is “the only means of protection for the public”.

Nielsen has “a clear predisposition to incur credit and take unacceptable risks with other people’s money”, the judge says.

Nielsen himself made it clear he wanted to be discharged and was entitled to be.

Justice Venning believes if discharged now, Nielsen would almost inevitably resurface in property developments “with further loss to banks, financial institutions, their investors and other creditors”.

As well as his commercially hazardous behaviour before his bankruptcy, Nielsen hasn’t been a model bankrupt, the judge finds.

At the hearing – with Nielsen appearing by video from new hometown Las Vegas – Justice Venning notes Nielsen wouldn’t come clean about his or his wife’s income: “Mr Nielsen simply noted ‘N/A’ to the request to provide details of his income [and] failed to supply any information about his spouse Ms Sirene Miller’s income,” the judge says.

Nielsen claims “she paid all the bills” so “[Miller’s] income should have been provided”, he adds, and “it’s difficult to accept Mr Nielsen hasn’t received any income at all over the last three years”.

The judge heard there were also allegations of Nielsen doing business during bankruptcy – a legal no-no.

Evidence was given of an email address and LinkedIn profile under ‘Nielsen Capital’.

More concerning, the judge says, “is Mr Nielsen’s further involvement and dealings in property in New Zealand” – two of those deals were in Queenstown.

Little Rock Management, with management rights to the Nielsen-developed Heritage Villas in Fernhill, was directed by Nielsen until just before bankruptcy – Miller then took over as director.

In selling those Heritage management rights, Justice Venning cited evidential emails of Nielsen being “the controlling force making the business decisions”.

Nielsen also had a hand in Brick Street Properties selling off land behind the Heritage Villas shortly after bankruptcy, the judge found.

Brick Street was owned by a good friend of Nielsen’s and email evidence showed Nielsen signing off as company consultant, the judge finds.

Rosebud Corporate Trustee, a company involved in an Auckland property development, also had Miller as a director – yet Nielsen pulled the strings, according to Justice Venning.

The judge also slates Nielsen’s pre-bankruptcy behaviour as “commercial irresponsibility”:

“The extent of loss to creditors and apparent lack of any substance to back up the guarantees Mr Nielsen provided are of concern.”

Justice Venning warns Nielsen he’d better be on good behaviour from now to 2015 – or he may not be discharged.

Nielsen by the numbers

 $20.4 million owed personally when bankrupted, mostly to failed finance firms Bridgecorp, Capital & Merchant, Strategic and Dominion

27 Nielsen companies in liquidation

$82m owed to unsecured company creditors

$US26.7m in US debts, according to court default judgments

$US1.1m Las Vegas home owned by trust with Nielsen liable for $US2.7m mortgage

Zero income during bankruptcy – wife Sirene pays all bills

SOURCE: JULY 24 HIGH COURT JUDGMENT

frank@scene.co.nz