Viskovich HC Auckland CIV 2010-404-4157 [2010] NZHC 1976 (2 November 2010)

Last Updated: 17 November 2010

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 2010-404-004157}

UNDER the Insolvency Act 2006

IN THE MATTER OF an application for approval of a creditors compromise by LESLIE DAVID VISKOVICH

Hearing: 2 November 2010

Counsel: S H Barter for trustee

Judgment: 2 November 2010

_{ORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTT}

Solicitors:

_{Barter & Co, PO Box 197, Albany Village, Auckland 0755}

VISKOVICH HC AK CIV 2010-404-004157 2 November 2010

[1] This is an application by Christine Liggins, as trustee, for approval of a proposal made by Leslie David Viskovich to his creditors.

Amendment of application

[2] Although the application is said to be made by Ms Liggins as trustee, it is signed, apparently inadvertently, by the solicitor for the insolvent. When I raised this with Mr Barter, he made oral application to amend the application to make it clear it is being brought by Ms Liggins as trustee.

[3] Although notice of the amendment, obviously, has not been provided to the creditors, I do not see that it can prejudice them in any way. I make an order amending the application, to show it as being signed by Mr Barter as solicitor for the trustee.

Statutory pre-requisites

[4] Ms Liggins was appointed trustee for the creditors at a first meeting of creditors held on 20 July 2010. She had previously accepted appointment as provisional trustee, and endorsed the proposal sent to creditors accordingly.

[5] Mr Liggins applies pursuant to s 333 of the Insolvency Act 2006 for approval of the proposal. The application is supported by a report dated 8 October 2010. That report evidences that:

a) The proposal was lodged in Court in 1 July 2010;

b) Notice of the proposal, and of the creditors’ meeting to consider it (supported by requisite documents), was given to every known creditor affected by the proposal;

c) The meeting of creditors was adjourned from 20 July 2010 until

24 August 2010 at the request of the largest creditor and one other for more information, and further from 24 August 2010 until

30 September 2010 and then to 7 October 2010 as a consequence of change of representation for the insolvent, and a request for yet further information;

d) Following the change of representation the proposal was amended to correct errors and clarify aspects of it, and a supplementary statement of affairs was filed and served on the creditors;

e) The proposal, as notified to creditors ahead of the meeting, was passed by resolution of the requisite number and value of creditors who voted on it (either at the meeting on 7 October 2010 or by postal vote), subject to some modifications requested by Matrix Custodian Limited (being the sole creditor attending the meeting). Those modifications affected Matrix only (they set a time frame for payments to be made to Matrix to coincide with the time frame for a moratorium currently in place in respect of Matrix, and provided that Mr Viskovich would have no claims against Matrix or a range of related parties);

f) Ms Liggins recorded the modifications as part of the proposal and has signed resolution recording the acceptance of creditors.

[6] Although technically the modifications should have been put to creditors ahead of the formal resolution, I consider that the present application can go ahead without need for the meeting to be reconvened on the basis that the modifications do appear to affect Matrix only (they do not appear to prejudice the other creditors in any way), and notice of the modifications has since been given to all other creditors with notice of this hearing. None of the creditors has taken issue with this modification.

Assessment of proposal

[7] In her report to the Court, the trustee confirms that the information given by Mr Viskovich as to his assets and their realisable value, and as to his debts and liabilities, are as declared to creditors, and notes that four creditors (named in her report) as well as a family trust have agreed that they will not receive any distribution under the proposal.

[8] The proposal in summary, is that Mr Viskovich will make quarterly payments to the trustee of $12,500 for the next three years, to be applied towards proven debts, with those payments to be made from his income generated as working as a consultant and as a director of a company. The trustee will make distributions to creditors quarterly, with the first payment being three months from date of any approval. Distributions will be to creditors proportionately to the percentage of total debt as at 1 July 2010 (being the date of the filing of the initial proposal). Interests associated with Mr Viskovich who are also creditors, have agreed to waive any payments under the proposals, thereby maximising the amount available to other creditors.

[9] Ms Liggins has expressed the view in her report that the proposal is advantageous to creditors because if he is adjudicated bankrupt, the costs of realising his assets and administering the wind up of his estate will exceed the minimal amount of assets expected to be realised ($9,450) so that creditors would be unlikely to receive any distributions. In the alternative, under the proposal, he will pay

$150,000 over the three year period.

[10] It is also of relevance, and a factor which I can take into account, that no creditor has objected to the Court granting its approval.

[11] I am satisfied that:

1. The statutory provisions in relation to proposals under sub part 2 of part 5 of the Insolvency Act 2006 have been complied with.

2. The proposal has been accepted by the requisite number and value of creditors.
   

100. The terms of this proposal are reasonable, and are calculated to benefit the general body of creditors.
     

d) There is no reason to consider it inexpedient to approve the proposal.

5. The proposal makes proper provision for prior payment of preferential debts, and the trustee’s fees and expenses.
   

Decision

_{[12] I make an order as sought in the trustee’s application dated 11 October 2010.}

Associate Judge Abbott