Bankrupt Queenstown developer Rod Nielsen’s wife may hold the key to an investigation against him.
Auckland Official Assignee David Harte confirms the Insolvency and Trustee Service is investigating Nielsen.
“We have received information from creditor sources with allegations that [Nielsen] may be breaching the Insolvency Act by being involved in the management of a company without the prior consent of the Official Assignee.”
This comes a fortnight after a group led by Queenstowner Duncan Brown accused the failed developer of running a surviving company.
Brown forwarded several emails to the Insolvency and Trustee Service.
“The emails appear to show Rod Nielsen still behaving as a director of Little Rock Management,” Brown alleged.
One email is signed “Rod Nielsen, consultant to Little Rock Management”.
Little Rock is one of only three companies still alive and kicking from 118 firms which Nielsen was associated with. Brown’s group owns units at Heritage Villas – which Nielsen developed – and wants to block Little Rock from selling management rights.
Bankrupted last Sept-ember for $17 million, Nielsen could no longer run the businesses and stepped down as Little Rock director last October – but wife Sirene Millar immediately became its new director.
Harte’s statement, emailed to Mountain Scene, includes part of the Insolvency Act which says that, without permission, undischarged bankrupts mustn’t manage or control a business – nor can they work for a relative or an entity “owned, managed or controlled by a relative of the bankrupt”.
The alleged offence carries maximum penalties of two years in prison and/or a fine of up to $5000, Harte says.
But even if his investigation finds Nielsen had a hand in Little Rock, Harte’s powerless to stop any sale of its management rights.
The Insolvency and Trustee Service can’t intercede in Little Rock affairs because its shares aren’t held personally by Nielsen but via a trust of which he’s a director – and bankrupts are allowed to act as trustees, Harte says.
Nielsen and Millar live in Las Vegas on the authority of the Insolvency and Trustee Service.