KEVIN STENT/Fairfax NZ
PRICEY RIDE: Coffey?s 2008 Aston Martin V8 Vantage, for sale for more than $120,000, is listed as collateral for a debt.
A Wellington businessman at the centre of a scandal over leaked confidential government documents two years ago is embroiled in a new row - this time over the sale of the assets of his security businesses before their collapse.
Paul Coffey received government documents from corrupt former ACC national property manager Malcolm Mason. Mason was sentenced in March 2011 to 11 months home detention after pleading guilty to bribery and corruption charges.
Mason took $160,000 from Wellington property developer Greg Hutt, a $9000 trip to the Singapore Grand Prix from Bayleys real estate agent Rohan Hill and provided a confidential document listing all government departmental security officers to Coffey.
Neither Coffey nor Hill were charged by the Serious Fraud Office in relation to the incident but Hutt was sentenced to home detention on bribery charges.
Now Coffey's sale of the assets of his security businesses is the subject of legal action taken by the liquidator of his failed companies against the new owners - his former staff - for underpaying for the businesses. They provide security installation and monitoring services to businesses in Auckland and Wellington.
Deloitte's Barry Jordan, one of the liquidators of the companies formerly known as Alligator Security and Independent Monitoring Services, said he was taking legal action against the new owners, IMS Security, for a "transaction at undervalue". No date has been set for the court hearing.
Jordan said the legal proceedings related only to the sale of Independent Monitoring Systems but the two companies were sold to the same purchaser and were directly related. The second company, Alligator, was not included as a claimant as Jordan has not been able to appropriately value the business.
The liquidator's reports say Coffey sold the businesses on July 17, 2011, to IMS Security, the day before the Inland Revenue Department (IRD) successfully liquidated them for non-payment of more than $750,000 in tax including unpaid GST and PAYE.
After the sale and purchase agreement was signed for the business assets, Coffey appointed receivers to the two companies on July 18, and changed their names to CW2 and WC1.
IMS Security is owned by former Alligator Security management Liza Anderson (who was also a shareholder and director), and Paul Hodson. The duo also majority-own Eye Spy Security with Nigel Hughes, who owned 70 per cent of the failed security companies with Coffey. IMS Security's Hodson denied any wrong-doing in relation to the purchase and said the only thing they were guilty of was "working their arses off".
Hodson said he was a genuine buyer of the business and had mortgaged his family home to purchase it.
Coffey had nothing to do with IMS Security, he said.
?Definitely not. [Coffey] continues to drive his Aston Martin around and flit in and out of the country. To say that irks me is an understatement," Hodson said.
Receiver reports show the situation got complicated following the sale of the two companies' assets.
Debts from the two companies were cross-guaranteed and overall there is still a deficit of $1.5 million owed to creditors.
Receiver Shepherd Dunphy said first-ranking creditor Westpac Bank was paid the $147,000 or so it was owed in full from the sale of the assets of WC1, and also nearly $98,000 from the sale of the assets of CW2. No funds have gone to Coffey although the cash received from settlement of the business is recorded as $92,765 in cash by the receiver.
The IRD has been paid $36,000 and is still owed over $700,000.
The receiver said he had "extreme difficulty" reconciling information provided by the company. Coffey is accused by the liquidator of excessive expenditure, including buying a luxury Aston Martin vehicle, that added to the companies' financial woes.
In a six-monthly report last July, Jordan said the special edition Aston Martin "would not ordinarily be required in order to successfully operate a security installation business, at a time when the company was unable to pay its due debts".
Car ownership documents show Coffey owns a 2008 Aston Martin V8 Vantage, with the personalised plate V8N4oo, which is currently for sale for more than $120,000.
Its TradeMe listing says the car is the only one of its type in the country and is number 16 of only 240 ever built. It has a 4.3 litre V8 engine, sports pack with "diamond turning", black leather seats and a "unique numbered plaque".
However Marac has two securities registered over the car as collateral for an outstanding debt Coffey is said to owe.
- ? Fairfax NZ News
Source: http://www.stuff.co.nz/business/industries/8719269/Coffey-back-in-hot-water-over-sold-off-assets
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