Blue Chip restructure 'nauseating'

At the same time it also announced that one of its former main subsidiaries, Blue Chip New Zealand, had been put into liquidation. This means at least 21 Blue Chip affiliated companies are in liquidation in New Zealand. At least $70 million is owed to about 3000 investors in New Zealand.

The Dominion Post
April 11, 2008

Blue Chip restructure 'nauseating'
David Hargreaves

Property investor Olly Newland says plans by the parent Blue Chip company to restructure itself and raise more money in Australia are "nauseating".

Blue Chip Financial Solutions, which toward the end of last year put its New Zealand operations into the hands of a now failed franchise, announced plans yesterday to raise about A$4 million (NZ$4.7 million) from shareholders, to change its name, and to trade on.

At the same time it also announced that one of its former main subsidiaries, Blue Chip New Zealand, had been put into liquidation.

This means at least 21 Blue Chip affiliated companies are in liquidation in New Zealand.

At least $70 million is owed to about 3000 investors in New Zealand.

"They've just cut loose all the poor people here," Mr Newland said.

He has been representing investors out of pocket in the Blue Chip franchise collapse, and laid a complaint with the Commerce Commission, alleging possible breaches of the Fair Trading Act. The commission is investigating.

"It's a shocking look. They've shown no remorse at all for what they've done and they are not the slightest bit interested in fixing it by the look of it … It doesn't sit well with me," Mr Newland said.

BCFS chairman Julian Gosse said in a statement to the ASX yesterday that the name change - to Northern Crest Investments - was to "quarantine the listed company from the reputation associated with the cancellation of the New Zealand franchise, which operated under the Blue Chip brand".

Mr Gosse did not reply to a BusinessDay email requesting an interview.

He said in the statement that Blue Chip New Zealand's liquidation would not affect Northern Crest. Northern Crest had several trading subsidiaries in New Zealand unaffected by the liquidation, and these would carry on.

He said that Northern Crest had successfully renegotiated its banking and loan facilities for its subsidiaries in Australia and New Zealand and intended paying all debt to its secured financiers by March 31, 2009.

Northern Crest would announce, before the end of May, the impact on its income and its balance sheet of the cancellation of the New Zealand franchise.

A review of its performance for the year to March 31, 2008 would be given, along with details of the proposed share issue and capital raising.


Brought to you by WikidFranchise.org

Risks: Franchise business model perfectly suited to enable massive fraud, Rebranding usually hides real objective, Ponzi (pyramid) scheme, Reputational risk, Restructuring legislation is deficient, Incompetent or predatory: for the small business investor, the outcome is the same, Opposition to fake franchisor insolvency and ownership flip, New Zealand, Australia, 20080411 Blue Chip

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License