Business Scoop
Network

Ross Asset liquidators claw back a further $3.1M

Article – BusinessDesk

July 13 (BusinessDesk) – The liquidators for Ross Asset Management clawed back another $3.1 million from investors in the six months to June 16 while increasing the pressure on those still holding out by launching more lawsuits.Ross Asset liquidators claw back a further $3.1M from investors, launch more lawsuits

By Jonathan Underhill

July 13 (BusinessDesk) – The liquidators for Ross Asset Management clawed back another $3.1 million from investors in the six months to June 16 while increasing the pressure on those still holding out by launching more lawsuits.

To date, 182 people who had invested with convicted fraudster David Ross have settled with the liquidators for a total of $19.1 million. PwC’s John Fisk and David Bridgman have invoked a clawback from transactions made when the RAM entities were insolvent.

In the report, released today, they say 21 claims against investors remain unsettled and of those, the liquidators have filed legal proceedings against 13 and are in settlement talks with the remainder. That’s an advance from their previous report, for the six months ended Dec. 16, when 158 investors had settled for $17.5 million and 43 claims weren’t settled. At that date, they had 10 lawsuits underway and were in talks with the rest.

The liquidators have benefitted from a Supreme Court ruling in May last year that let Wellington lawyer Hamish McIntosh keep the principal he invested in RAM but return the fake profits. Prior to the ruling, just 54 investors had reached settlements totalling $9.7 million.

The clawback means investors legitimately owed back their money saw the amount held by the liquidators as cash in the bank rise by about $2.2 million to $18.8 million in the latest six months, although costs will eat into the funds. Total receipts for RAM for the entire period from December 2012 to June 16 rose to $24.6 million from $21.5 million six months earlier. Payments rose about $1 million to $6.9 million.

The liquidators have collected $1.8 million in fees to date for their services, including about $200,000 in the latest period. Legal fees have been more costly – at $3.2 million in total, up from $2.6 million as at Dec. 16.

Other recoveries have stalled or were exhausted, including reparations from David Ross of about $1.1 million and the sale of family property for a total $913,000, along with $2.5 million from the sale of shares. Of other entities in the RAM group, only Dagger Nominees recorded appreciable cash in the bank at $1.1 million.

Wellington-based David Ross built up a private investment service by word of mouth, producing regular reports for shareholders indicating healthy but fictitious returns. Between June 2000 and September 2012, Ross reported false profits of $351 million from fictitious securities trading as part of a fraud that was the largest such crime committed by an individual in New Zealand.

In reality, about $100 million to $115 million of investor funds were frittered away in the Ponzi scheme, and the liquidators sought to claw back funds paid out to investors in the lead-up to the collapse, going all the way to the Supreme Court, so as to equally share the money for the 1,200 or so investors out of pocket.

The liquidators say they’re still waiting for High Court directions on the model for distributions.

(BusinessDesk)

Content Sourced from scoop.co.nz
Original url