Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

[Lawyer Destroyer]

In this thread, I intend to debunk the myth that liquidators act in the best interests of the creditors and reveal to you all how they operate, what they do, how they get paid and ultimately what roles they play, this will include significant revelations about certain firms and certain lawyers who will be carefully referenced to ensure that forum rules are adhered to. In the meantime as I prepare to fly to Cape Town shortly, I will consider where to start on this fairly broad subject.

Please feel free to contribute -...

[KimH]

I was personally affected by this very practice earlier this year - after raping a very profitable and viable group of companies, my ex employers filed for liquidation - many of my colleagues were left with nearly 3 months of unpaid salaries and all of them are patiently waiting for the liquidators to pay them what is due, call me cynical but somehow I doubt any of them will see a cent.

I look forward to reading your further postings on this.

[Koos C]

I would like to tell my lawer story

8 lawyers in 3 years and now my stuf aregoing to get sold to pay sombody else's debts. the liquidator was worned that it tools and assets do not belong to them but he just collect stuf to sell. Will plase the whole story later

[Asterix]

Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

LD - There are a lot - an incredible amount of these happening - and it is just like fraudulent insurance claims - in concert with a supplier of retail goods.... a drain on the whole country. There are rumours that this is just a dirty revenue gathering excercise for some directors who work with lawyers and liquidators, planning the steps and executing them neatly. This is almost like daylight robbery and just about everyone I know has been affected - it's just another form of crime....

Look forward to reading your posts and information on this.

[Dave A]

Kim's probably got a fair gripe. Directors who plunder the company and then toss the scraps into liquidation should not be getting away with it easily.

But blaming things on the liquidator is a bit rich. The liquidator's job is to attend to the burial of a failed enterprise - as cost effectively as possible. If they burn cash on doing forensic audits sniffing for past transgressions just sommer, the creditors would be the very first bitching and moaning about the waste of cash.

If you know of hijinks, get hard evidence (or at least submit affadavits) to the Master. Attend the meetings of creditors and raise a stink there.

[Lawyer Destroyer]

Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

Dave - fully agree - there are a lot of good liquidators who don't take nonsense from dodgy directors - many of them take their work seriously and take professional pride in what they do and the important role they play in business and the countries economy. But like every trade - there are always a few rotten eggs, low class characters, unscrupulous who simply use their powers (or don't) obscenely....

OK – Back from Cape Town and catching up. I asked around a bit on this saga and got a colleague who has some specialist access to have a quick glance and do some research for me as well. Asterix (and friend/s – fellow Gauls?) – You must push this particular issue into criminal charges, there are several reasons, some which I cannot share with you right now, but which will become clear later. There is an old maxim “seek and ye shall find…�. You may not have the tools or the access at the moment, but there are those that do and they are already briefed and waiting in the wings – waiting and watching…..

This situation is going from Gray to Black very quickly. You need to determine initially if it is a Ponzi scheme or not. Once that is determined the way forward becomes very very clear – quickly. As I wrote earlier and presented a definition, you need to match this up to available information and facts – once established, the fun and games begin. From what I can see and from what I have gathered……it smells like a Ponzi scheme, it sounds like a Ponzi scheme, and it clearly resembles a Ponzi scheme. This is a serious situation and needs to be treated seriously ok. People who commit these are always con artists with silver tongues, credible people who present well, convincing individuals who have support from their own family members and relatives, their own “infrastructure� – “vra my broer Jack, hy lieg net so hard soos ek….�who for the large part have been compartmentalised and only have parts of the truth….. If your friend has not spent the money on a private investigator yet – now is an ideal time….there are a number of really good ones and alongside a good reputable law firm are an arsenal and formidable force – . Next he/she must team up with the group who are already contesting/investigating the business collapse (unity is strength). Lastly – go in and see a member of the SAPS who deals with this type of action. Just ask at your local police station – they will point you in the right direction. This will prepare you for what you have to do next. Finally and I have PM’d you both a specific checklist. This is a dirty situation and you need to ensure that you stay and play by the rules all the time. There will be many opportunities to slide bases – take no shortcuts, just do this one step at a time, one day at a time. Remember if you sit by the river of life long enough the bodies of your enemies will eventually float by you…..

In the greater scheme of things this is a small fry liquidation, but a very good example to be set especially from what I have seen and can gather. So, persist in your efforts and remember the words of Winston Churchill – Never, never,never,never, never, never give up.

I have asked a number of friends and colleagues to follow this particular case and we will send you a PM link to a separate location where we will give you the benefit of specialist advice (not professional mind you) as well as otherwise unobtainable information that your friend/s will find invaluable. We will not mention names or anything else – don’t want the bad guys in this story knowing any more than they do ok.

As things develop I will let you know, but in the meantime, I want to rather focus on the other thread http://www.theforumsa.co.za/forums/s...ead.php?t=8355 to the benefit of the broader business community. It is a very sensitive subject and I am going to try and play it out as an educational process in steps. Please follow that one too….it is important and will also reference several areas and information you and your friend may find applicable and useful.

[Lawyer Destroyer]

Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

Ok – Lets Compare business in South Africa to a busy Nationwide road infrastructure, complete with car parks, service centers, garages, workshops, scrapyards, spare parts centers, panel beaters, licensing depots and even driver training schools and centers….. etc – The Companies Act is like the Road Transport Act, and gives us all the guide lines, stop streets, yellow lines, white lines, solid white lines, double white lines, one way signs and so on and so on. The Law provides regulatory back say like the TPA, the Traffic Department, etc. My previous description is applicable – quote South Africa is in a state business wise. You can compare RSA business to a free for all on the roads. The drivers (directors) aren't qualified in many cases, driving vehicles, too big, too fast and out of control. There's a lot of drunk driving taking place, unlicensed driving and buying and selling of stolen "vehicles" and parts that would blow your mind. If the RSA Government wants to do one thing to fix the economy, just one thing, it would be to tighten up its business Highways. License drivers (directors) effectively, train them proficiently - but most of all, punish them firmly, just like we do on the roads. What would we say if the highways were actually a free for all and there was pandemonium on the roads....bystanders getting hurt and killed, passengers, drivers and the public getting slaughtered...? well its actually happening on our business highways - and its appalling! No wonder no one wants to invest in our small to medium businesses, no wonder they call it Rip Off RSA, no wonder we are known as being scammers, second only to Nigeria - our business roads are in absolute chaos and very little is being done (I know 3 Kings is coming - too little too late...). A special task force is needed and most of all - efficient policing and jurisdictional enforcement.

( From another thread - http://www.theforumsa.co.za/forums/s...ead.php?t=8337 )

In this “business� mix you have all sorts of businesses – lets compare them to vehicles on the road - extra heavy trucks and drivers (big companies) , taxi’s, construction vehicles, groups of vehicles, furniture removal trucks and small cars (which in many cases are likened to Closed Corporations – fast moving, low maintenance, low cost – for want of a better description “Budget Business� vehicles…).

Now – on these (very) busy business highways and bi ways – accidents, breakdowns and disaster WILL happen in the course of traveling and journeys. Unfortunately, the roads are not clear, in most cases the drivers aren’t suitably qualified, most driving takes place in the dark with no lights (behind walls – hidden) and most accidents are not seen happening until the wreck is lying upside down on the side of the business road. To clear these up we have tow trucks – and in business – Liquidators (This description was originally introduced to me many years ago by a tutor at University when I first started out. Tow truck drivers and Liquidators – virtually one and same.

What I would like to deal with here is what happens when one of the directors or business owners purposefully drives his business vehicle “off the road�, when a director or business owner purposefully drives his vehicle into a bridge, when a director or business owner first strips and sells all the insides and removables from the vehicle (takes out the expensive radio, sells the tires and rims and puts some shoddy ones on, takes out every bit of the inside, even swops the motor – then crashes the vehicle and burns it – or declares it stolen and then burns it. Just walks away after tearing the guts out of it with no regards for the owner, or the bank, or the garage, or the people who just serviced it, are still owed for the maintenance, the tires, the panel beating…..What happens if it is a bus load of passengers who have paid their fares and the driver crashes purposefully just outside Jhb so he doesn’t have to take them all the way to Durban ??? – This is what I am talking about – a liquidation is a wreck – a Liquidator is a Tow Truck operator – and a lawyer, well just a lawyer – sometimes good – sometimes bad – always appoint like a tradesman – his reputation is only as good as his last 5 or 6 jobs….do your homework thoroughly…..

There is little insurance in small business for bad business so – and normally the passengers, investors or creditors end up footing the bill for the “drivers� recklessness, abuse of the business vehicle, lack of administration , lack of maintenance, or just plain right dishonesty and intent to defraud everybody involved – and try and walk away – we will look at this carefully – and I welcome any input (good or bad) at any time from anyone.

So – now at least we have sketched the scene……and hopefully any reader is on “the same page� – busy highways and roads – the business arena, vehicles on the road - businesses of all shapes and sizes; The Companies Act – The Road Transport Act, Directors and business owners – Drivers and vehicle owners, Liquidators – Tow Truck Drivers and wrecking companies, Lawyers – well just lawyers ….

So – just like the Tow Truck drivers you see parked on the side of the road at busy intersections, Liquidators also sit in wait and monitor businesses for collapse or wreck. You see they hook up to the wreck and then shunt it around just like a tow truck driver, either to the scrapyard, the panel beaters – or if someone has been derelict of duty or someone has been killed – to the Police Station for further investigation and criminal charges to be laid. Sometimes a liquidator(Tow Truck Driver) will be told in advance of a wreck going to happen, it may be from a friend of his who is a lawyer, in which case the client will have already spoken to his lawyer who he has told “ I can’t afford the payment on this vehicle anymore� and the lawyer will have said to him confidentially – just wreck it and take the insurance money – here’s how you do it………………………………………… ……………. – and if anything goes wrong – I am here to defend you…..sound familiar ?? I thought so - …..you see this actually happens – a lot – and it’s a plague.

I will continue with this later – but for now want to add for the benefit of any “passengers� like Kim, watch your drivers carefully at all times !! – monitor them – and keep tabs on them always – its your right as an employee, a passenger. Don’t take their word for it – speak amongst each other and don’t wait for the wreck – at the first sign of trouble “Take Action�. “Blow the whistle� – get the driver back on track. DON’T HESITATE – HE WHO HESITATES IS LOST….

No business collapses overnight…..it starts with a “sneeze� and develops through flu like symptoms into Pneumonia before becoming terminal……When you hear a business sneeze, recognise a symptom that things aren’t well or you know things are not right – “Blow The Whistle� - and by this I mean first – seek counsel, use this forum – Dave Alcock has created a “Knights of the round table� trouble shooters forum, where if you put your problem up – and you don’t have to name names – you will get the benefit of good, realistic, practical opinion and guidance from many quarters. This – is what this forum can do….it can help straighten the business highways, it can alert the “business traffic police� to drunken driving, reckless driving and any other business road sins – and prevent a wreck before it happens. And prevention is always better than cure…..here’s what you can do as an employee – You can save the Titanic from sinking (your business from being liquidated - point out the problems – ask for help and if no one wants to listen – get guidance……

The best piece of practical “business� safety equipment to avoid a wreck (liquidation) is an alert and attentive employee....

[Koos C]

Skelm Liqudators

This morning I got the liquidators report. Apparently there were a meeting held on feb but non of the creditors were notified of this. The seconda meeting was held in may and again non of the creditors was notified of the meeting.
I have a high court judgment against this company that concerns two properties and R500k + but the liquidator disregard my claim. According to reg 80 of the liquidation act I must give my permision in writing to athorize the sale of the propertry but the liquidator did not contact me in this regaurd

where do I go to report a liquidater who is braking the law nowingly ???

8 lawyers in 3 years and now my stuf aregoing to get sold to pay sombody else's debts. the liquidator was worned that it tools and assets do not belong to them but he just collect stuf to sell. Will plase the whole story later

[Lawyer Destroyer]

Complaining about a liquidator

Koos C I have PM'd you details....

[Lawyer Destroyer]

Directors Nefarious Use Of Liquidation Process To Avoid Consequences Or Discovery

A lot of people have pm'd me to ask when I will continue this thread. The answer people is soon. I have a high case load at present and am also assisting a private investigation which started on this Forum - great tool Dave A. Bringing people together. It has surprised me just how much information has surfaced from the few references to this Dr DS Grieve Ponzi Scheme case on this board and I am impressed by the amount of volunteers willing to provide, share and give information, advice and even assistance. This is a very useful and largely underestimated resource to anyone in the legal field as well as anyone with a business related problem -

I will continue this shortly - probably within the next two or three weeks. I want to make it inspirational, encouraging and educational.

[ReliaGains]

Abuse of Liquidation Process

I have very basic question with regards to the employer's ability to abuse the liquidation process.

I received an award from the CCMA related to a matter involving an unscrupuloius CEO. Long story short...the company informed me that they would be taking the matter for review with the labour court, started the process, but after the first step they indicated that they would be liquidating.

We tried to arrange for meetings with the liquidator since April (without success) and just found out the company had changed it's name and landed anew contract. The company profile uses the "old" company's history, trademarks and copyrights. The methodologies and most of the writings are materially the same. The old and new profiles are essentially identical. The new name does not exist on CIPRO, but the "old" company shows as being in force and, bothe profiles mentions that the business was known by the same name in years gone by.

The Question: Is the use of the this information allowed, if the old company had been liquidated, or am I right in my view that these companies are on and the same entities?

[Lawyer Destroyer]

Phoenix Company

Reliagains - credit to you for standing up. It is called or termed a "Phoenix Company" and provided it meets the criteria can be treated as the original in event of transgression of the law or investigation. Suggest you drop an anonymous line to the Registrar CIPRO and make sure they see that you have copied it to several other regulatory bodies - INSOL is a good one to copy to as well as the Chamber of Commercer (or at least the law firm that represents them in SA) .

[ReliaGains]

Thank you very much. I will do this immediately.

I hope that I am not hijacking this topic, but I have investigated the story a bit further and found some interesting "goings-on". Before the company was liquidated in March 2010, the name was actually changed in November 2009. However, the company issued with a letter in December and made a submission to the labour court in February, all in the "old" name.

I also have not been informed about anything regarding creditors meetings, or anything else, nor am I able to trace the liquidator.

[Dave A]

I also have not been informed about anything regarding creditors meetings, or anything else, nor am I able to trace the liquidator.

I have a few debtors that fall in that category. If you manage to contact the responsible person, you're told the company is in liquidation.

After some time without notices, you investigate and it turns out there's been no application for liquidation. The company is just a stripped shell waiting for someone to be stupid enough to apply for liquidation and effectively finance the tying of the bow that clears the mess away.

And then I have one international company that was liquidated in the UK - none of the local creditors got a look in anywhere in that process.

[sterne.law@gmail.com]

In terms of labour issues where a company dissappears, closes or liquidates, there is provision for what is called piercing the corporate veil. Funny enough such a thread was started in the labour forum about a week ago.
Of course the issue is that inevetiably legal action costs money and so it is that the employee or smaller person does not press on and loses out. Deciding the battle is not worth it. Unfortunately, employers or businesses who use liquidating as a means out are street smart and dont intend being fair or morale. (a thought to bear in mind is that a defendent or respondent can ask the plaintiff to put up security for costs subject to certain criteria, insolvency being one of them) Asking for R100 000 in security often gets teh tune changed!!!

Again one can argue that they hide behind or use smart lawyers to pull these "stunts" but as Dave points out they are merely doing their job. If every lawyer acted based on what they believed to be morally right - there would be no lawyers or litigation The lawyer is tasked with getting the result the client seeks