Receivers for Ross Asset Management have signalled they will
start selling off some of its assets because its founder does
not have the means to cover the costs.
Investment adviser David Ross of Wellington was ordered to
pay the costs of receivership after his companies were placed
under the control of PricewaterhouseCoopers this month
following investor complaints to the Financial Markets
Authority (FMA) in a suspected ponzi scheme.
But receivers' lawyer Jenny Stevens told the High Court at
Wellington today that Ross had insufficient means to cover
costs - and those he did have were not sufficiently liquid.
She said receivers would have to sell some assets held by his
companies to cover the costs, which totalled $153,683.49 to
Receivers have said Ross' companies have $11 million in
assets out of the almost $450m placed with it by investors,
and there was little likelihood of identifying more assets.
The receivership costs so far have included fees for PwC and
law firm Bell Gully, as well as the costs of staff, record
storage, rent, security monitoring and IT.
"The position is that Mr Ross' personal assets identified to
date are insufficient to meet those costs," Ms Stevens said.
Ms Stevens sought an order allowing receivers to sell
property owned or controlled by the Ross Group to recover
She said the receivers and counsel had been "very conscious"
of the costs, given the circumstances, and had tried to be as
efficient as possible, including discounting their rates.
Ms Stevens said receivers were in the process of preparing an
application to liquidate Ross' companies.
Ross' lawyer Gary Turkington said the receivers already had
the right to sell the companies' assets and they did not need
an order from the court.
Justice Steven Kos said the receivers could sell assets and
he did not need to formally confirm that. He said there was
nothing unreasonable in the costs presented to court.
FMA lawyer Hugh Rennie QC asked for preservation orders to
remain in place until the next hearing.
In a memorandum to the court, he set out the reasons for
Ross' companies being liquidated, including that they had led
to major losses and may have been in breach of securities
He said the powers held by liquidators were more extensive
than those of the receivers.
The identified assets needed ongoing management with the
objective of getting the best return, which was not
achievable under the preservation orders, Mr Rennie said.
"It is in the interests of all investors that administration
costs are minimised by proceeding to realisation of assets as
early as possible."
Mr Rennie also asked the court to lift confidentiality orders
which have prevented the public release of court documents to
Justice Kos agreed to extend the preservation orders until
the next hearing on December 10, and allowed the
confidentiality orders could be lifted on agreement from
Counsel have three days to make submissions on whether any
information should remain subject to confidentiality orders.
Investor Bruce Tichbon, who is acting on behalf of more than
300 investors, asked for them to be included in proceedings,
and also asked for the liquidation of the companies be put
out to competitive tender.
Justice Kos said it was appropriate Mr Tichbon be heard, but
he could not be further involved in proceedings until he
applied to become a formal party to them.