Penniless Posipow man tells of fall

Press, Volume CXV, Issue 33964, 3 October 1975, Page 2

Penniless Posipow man tells of fall

A man told a meeting of his creditors yesterday he spent up to $lOOO a week during three months at the peak of his business activities.

Barry William Ferguson, aged 28, unemployed, an Australian now living at Lake Tekapo. told the meeting before the Official Assignee (Mr I. A. Hansen) that he was penniless.

Mr Ferguson was adjudged bankrupt on his own petition on September 2. He could not be sure, but thought the income from his two companies. Posipow International. Ltd, and Combined Community Marketing, Ltd, was between $lOO,OOO and $150,000 for nine months.

Mr Ferguson said he and his companies had four motor-cars, including a RollsRoyce, for which he had agreed to pay $30,000. He paid $15,000 deposit when he secured the vehicle from the New Zealand Motor Corporation. The other cars were a Mercedes Benz, which he brought- from Australia, a Jaguar XJ6, and an MG Mini. He said he bought the vehicles to project an image of success for his companies.

He backed up this image by spending lavishly on clothes, and staying at the best hotels while flying from one and of the country to the other running sales courses. Accounts frozen Mr Ferguson said the Trade Practices and Prices Commission and the Minister of Trade and Industry put a stop to this life-style in March and April, 1974, by enforcing the closing of the companies. This had the effect of freezing his bank accounts, making it impossible to trade. Mr Ferguson told the meeting that he arrived from Australia owing $20,000 on a Mercedes car and bn a mortgage he obtained on his mother’s house. He incurred these debts while working for an Australian firm, now defunct, which carried on a business similar to that he ran in New Zealand.

Car shipped back His earnings in New Zealand enabled him to discharge the mortgage on his mother’s home. He paid off the Mercedes by sending it back to Australia, where it was sold.

About half of , the money he and his companies earned in New Zealand was paid to directors who invested money, giving them the right to recruit managers and sell his self-improvement courses. He secured six directors, who each invested $2965 to obtain 175 courses in selfimprovement. The directors sold these courses to group managers at a profit of $9 a course, giving them a 30 per cent return. Recruited 250 In nine months of trading, he and other directors recruited 250 to 300 group managers, who each invested $695 to buy courses and recruit trainee managers. Mr Ferguson admitted that only $2400 worth of selfimprovement courses reached the public. His statement of affairs showed that he owed $21,911 to 22 unsecured creditors, including the Inland Revenue

Department, to which he owed nearly $15,000. Seven other creditors were listed as being owed $695 for unsuccessful investments in group managements within the business. Formal accounting Mr Ferguson said he adopted formal business procedures in accounting for all moneys received. He had considerable success in selling the selfimprovement courses in Wellington, where one course attracted 60 people. Mr Ferguson admitted that neither he nor his wife had any assets. He was now working for a relative in return for food and shelter. He was getting to the point where he was thinking about getting a job.