Friday, 15 January 2010

Insolvency Schemes and Alan Duff

Creditors Schemes are not used as much as they should. A careful and structured realisation of assets will always produce more for creditors than the well meaning and helpful, but hopelessly underfunded Official Assignee. I have written an update for schemes which is regrettably not online but is to be found in the New Zealand Law Journal “Insolvency Schemes under the New Insolvency Act” at 2009 [NZLJ] 47. This post is not however a link to the Law Journal, excellent publication that it is, but rather a comment on the recent attacks on Alan Duff, the New Zealand writer, who in making the conclusion that he could not make a living on publishing novels in New Zealand, decided to enter into property development. Alas, the ability to craft prose and the ability to craft money are not synonymous, and his venture failed. He then undertook a scheme of arrangement optimistically basing this on the sale of future novels he intended to write and publish. Not all his creditors agreed, and a finance company represented by John Weymouth, and Auckland lawyer, took exception to his proposal. Notwithstanding this, the High Court eventually approved the scheme and Alan Duff set off energetically to write his novels. He has managed to produce 2 so far with another on the way. While his productivity is to be commended, the novels have not been well received, and he concedes that too much haste may be an issue. What then stirred up trouble was that he joined a golf club. This enraged the finance company (or John Weymouth, I am unsure which), and they now want to cancel the scheme. The failure of the books to sell at bestselling speed may also mean the creditors will not receive dividends. Perhaps the story of the scheme would have made a better story than the novels-it certainly has drama, a courtroom battle and vivid characters!

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