Failed Mosgiel businessman Malcolm Burns has finally been declared bankrupt despite a last-ditch effort to delay the decision a fourth time.
Associate Judge Dale Lester declared Mr Burns bankrupt in the High Court at Dunedin on June 12 after the previous week giving him “a last chance” to pay what his company Otago Excavation owes vehicle leasing business FleetPartners Group.
The bankruptcy of Mr Burns, who has several businesses in liquidation owing millions to multiple creditors, was sought by NZGT (FP) Trustee Ltd, on behalf of FleetPartners Group.
Private investigator Thomas James, who acted on behalf of FleetPartners, confirmed the bankruptcy was related to debts owed by Otago Excavation.
The Mosgiel-based excavation company, of which Mr Burns is sole director, went into liquidation in 2022 owing more than $3.3million and is also in receivership.
Receivership focuses on protecting the interests of secured creditors, while liquidation involves the winding up of the company and the distribution of assets to all creditors.
The latest receivers report, published in January, stated it had secured debts of $1.7m with Kiwi Asset Finance and $1.3m with PFNZ, as of November last year. It is not clear how much is owed to FleetPartners.
In a minute issued on June 12 this year, Judge Lester acknowledged the FleetPartners debt was “relatively modest”, but said Mr Burns had known since at least November 2023 that he would have to deal with it and had still been unable to pay it.
Mr Burns was served with the bankruptcy notice on October 23 last year and the application he be adjudicated bankrupt was filed at the end of the year.
The application was scheduled to be called in court in February this year but was delayed three times on promises the debt would be settled.
Judge Lester’s minute noted that when the matter was called on June 12, Mr Burns’ lawyer, Kevin Sullivan, sought a further adjournment partly claiming that “actions on behalf of a counsel of a creditor in support frustrated the viability of funding”.
That funds coming from Mr Burns’ mother-in-law “did not apparently survive the provision of independent advice” was not a compelling reason to seek an adjournment, the judge said.
“If the lender thought better of the transaction with independent advice, that is not a change of circumstances that Mr Burns can rely on.”
On June 11, another creditor, which claimed it was owed nearly $900,000 based on two arbitration awards — both dated November 2022 — joined the claim.
Mr Sullivan said those debts were disputed and claims would be raised by Mr Burns to meet those debts.
But Judge Lester said nothing had been done about that since 2022 and he had made it clear he would not adjourn the bankruptcy matter again.
In a written statement to BusinessDesk, Mr Burns said: “The bankruptcy was the culmination of factors outside of my control and is solely due to personal guarantees related to the lending and leasing of the company.
“The FleetPartners debt was primarily made up of unrealised lease earnings remaining in the contract term at the time the company was liquidated. Ironically, FleetPartners refused to even consider taking an unencumbered security and chose to proceed with the bankruptcy. This will not have any effect, nor include any of my private creditors.”
Otago Excavation is a subsidiary of Burns Group 2018 Ltd, of which Mr Burns is also the sole director. Burns Group was placed in liquidation in the High Court at Dunedin in 2023 despite a late attempt for an adjournment which was turned down by Judge Lester.
Another subsidiary, Titan Bulk Haulage, was placed in liquidation in May last year on the application of Inland Revenue.
Administration of the liquidation was recently completed and a final report last month showed creditors had been left out of pocket by more than $1m.
