Ex-minister Pescott declared bankrupt

FORMER state Liberal minister Roger Pescott has been declared bankrupt, with investors claiming millions of dollars.

By InvestSMART · 8 Sep 2010

By InvestSMART ·
8 Sep 2010

Comments

FORMER state Liberal minister Roger Pescott has been declared bankrupt, with investors claiming millions of dollars.

St George Finance yesterday obtained orders in the Federal Magistrates Court over a $291,632 debt owed by Mr Pescott, and told the court the businessman owed it a further $3.68 million under a commercial bill facility. The court was told Mr Pescott had no assets in his name.

Nick Mellos of Grant Thornton was appointed Mr Pescott's trustee in bankruptcy.

Four other creditors supported St George's move. They included the liquidator of the failed tree plantation investment group Environinvest Ltd and the accountancy firm HLB Mann Judd.

Registrar Tim Luxton heard that Environinvest's liquidator, Jim Downey, had initiated several court claims against Mr Pescott, and if these succeeded Mr Pescott might be found liable for a further $12 million.

Mr Downey recently filed a multimillion-dollar claim against Mr Pescott, two of his fellow Environinvest directors, plus Mr Pescott's wife Caroline, his brother Euan Pescott, and various companies controlled by the Pescott family.

In a statement sent to The Age yesterday through Mr Pescott's lawyer, Caroline Pescott said neither she nor Mr Pescott owns the Trawalla mansion in western Victoria where they live.

In a separate statement, Mr Pescott claimed St George's action to bankrupt him was "perplexing at best". He claimed that while he had borrowed "less than $4 million" from St George, the bank's security was "valued at around $12 million".

But this is contradicted by sworn documents by St George's senior manager of credit, John Cassar, which indicate that the three properties secured against the $3,685,000 bill facility fall far short of Mr Pescott's $12 million estimation.

In an affidavit, Mr Cassar said the $3,685,000 facility was secured against properties at Burrumbeet in western Victoria, Yarra Junction and Warburton, which St George is in the process of selling. He told the court the bank expects the sales will reap only $1.77 million to $2.45 million.

In his statement, Mr Pescott criticised the Environinvest liquidation, describing the asset sale process as "a disgrace".

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

Who is Roger Pescott and what happened in the Roger Pescott bankruptcy?

Roger Pescott is a former state Liberal minister and businessman who has been declared bankrupt after St George Finance obtained court orders over a $291,632 debt and a $3.685 million commercial bill facility. The Federal Magistrates Court found he had no assets in his name and a trustee in bankruptcy was appointed.

Why did St George Finance move to bankrupt Roger Pescott?

St George Finance sought bankruptcy orders after Mr Pescott owed the bank $291,632 and was also liable under a $3.685 million commercial bill facility. The bank said it is selling properties secured against that facility to recover funds.

How much debt is Roger Pescott reported to owe and are there other potential claims?

Court documents show St George got orders over $291,632 and a $3.685 million facility. The liquidator of failed tree-plantation group Environinvest has initiated court claims that, if successful, could make Mr Pescott liable for up to about $12 million. Mr Pescott has contested some of the figures, saying he borrowed "less than $4 million."

Who has been appointed bankruptcy trustee for Roger Pescott?

Nick Mellos of Grant Thornton was appointed as Roger Pescott’s trustee in bankruptcy to manage the insolvency process and creditor claims.

Which other creditors are involved in the bankruptcy action?

Four other creditors supported St George’s move, including the liquidator of Environinvest Ltd and the accountancy firm HLB Mann Judd. Environinvest’s liquidator, Jim Downey, has filed multimillion-dollar claims naming Mr Pescott and others.

What secured properties are being sold and will their sale cover the debts?

St George’s affidavit says the $3.685 million facility was secured against properties at Burrumbeet, Yarra Junction and Warburton. The bank expects those sales to reap only about $1.77 million to $2.45 million—well short of the $12 million valuation Mr Pescott has claimed.

How does the Environinvest liquidation relate to the bankruptcy and investors?

Environinvest was a failed tree-plantation investment group; its liquidator has launched several court claims against Mr Pescott and others seeking multimillion-dollar recoveries. Investors in Environinvest are among the creditors pursuing funds, and the outcome of those claims will affect recovery prospects.

What should everyday investors take away from this case about creditor recovery and asset security?

This case highlights that creditor recovery depends on secured assets and successful court claims: St George is selling secured properties but expects limited proceeds, and liquidators can pursue additional claims that may increase liability. For investors, it underscores the importance of checking security, asset valuations and the risks in complex corporate or plantation investments like Environinvest.