Staff take everything and start new business

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Ultimate Geek
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#2618375 8-Dec-2020 21:53

@smegoff is the latest court decision available for the public to view or will that only be available when the full decision is released. Would be interesting to have a read. This whole thing has been interesting to follow.

SmegOff

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#2618387 8-Dec-2020 23:06

JUDGMENT OF JUDGE B A CORKILL
[1] On 1 December 2020 I received detailed submissions concerning a challenge bought by the respondents to an order of interim injunction made by the Employment Relations Authority; and as to an application for discharge of an existing freezing order.
[2] Following the hearing, I provided a brief opportunity to the parties to discuss whether the issues between them could be dealt with in whole or in part by the provision of undertakings.1
[3] To facilitate that opportunity, I extended the freezing order until noon today, asking counsel to file a joint memorandum by 5pm on Friday 4 December 2020 as to the result of their discussions. I said I would then issue a short judgment indicating my conclusions, and that reasons for judgment would follow as soon as possible thereafter.
1 As explained in New Zealand Technology Group Hawkes Bay Limited v Flashoff & Ors [2020] NZEmpC 213.
[4] Memoranda were duly filed last Friday indicating that agreement had not been reached as to possible undertakings.
[5] Accordingly, the parties are advised that the challenge in respect of the injunction made by the Authority is allowed, and its determination is set aside.2
[6] The application to discharge the freezing order of the Court succeeds; the existing order will lapse at 12 noon today.
[7] My reasons for judgment will be issued as soon as possible this week.
B A Corkill
Judge
Judgment signed at 10.45 am on 7 December 2020
2 NZ Technology Group Hawkes Limited v Flashoff [2020] NZERA 388 (Member O’Sullivan).

Geektastic

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#2618394 9-Dec-2020 00:50

Handle9:

It's gone into the legal system so no one will win. Commercial disputes that go legal are almost always lose:lose.

Generally legal action is a tactic to force a settlement. This employment sideshow will be similar.

Oh pish and tish, sirrah! Our good friends the lawyers will win! They always do.

(Note to self for future life - next time listen to your father and become a solicitor!)

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#2618420 9-Dec-2020 07:36

SmegOff:

...
[1] On 1 December 2020 I received detailed submissions concerning a challenge bought by the respondents...

Is that verbatim? You'd think that a judge or a transcriber of the court would know the difference between buy and bring.

Sometimes I use big words I don't always fully understand in an effort to make myself sound more photosynthesis.

Dynamic

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#2618442 9-Dec-2020 08:54

SmegOff:

Sale and purchase agreements were never completed.

Wow... that's massive. I can't currently imagine a scenario where I'd willingly hand over my livelihood to someone without a contract. I wonder what scenario led to that situation.... whether the sellers (not intending to be unkind here) were a little naïve in their approach or were somehow persuaded out of this by an unscrupulous purchaser. At face value, the purchaser is not coming across as squeaky clean.

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concordnz

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#2618560 9-Dec-2020 11:04

It's been clearly pointed out that there was a contract.
(& it's quite common for a business purchase contract to have terms which are filfulled over the proceeding years.)

The terms of these contracts weren't fulfilled & the Selling parties have been trying to get it resolved, prior to them taking these actions(from what is written in these filings).

Sadly I agree with Lias,
The Lawers of both parties will work together to create further conflict(already shown by the BS lodged by the NZTG lawyers - in direct conflict with standing law) extract as much money from both party's until they drive one or both sides bankrupt.

(it's likely to already have cost both sides in excess of $100k already)

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#2618565 9-Dec-2020 11:19

concordnz: It's been clearly pointed out that there was a contract.
(& it's quite common for a business purchase contract to have terms which are filfulled over the proceeding years.)

The terms of these contracts weren't fulfilled & the Selling parties have been trying to get it resolved, prior to them taking these actions(from what is written in these filings).

Sadly I agree with Lias,
The Lawers of both parties will work together to create further conflict(already shown by the BS lodged by the NZTG lawyers - in direct conflict with standing law) extract as much money from both party's until they drive one or both sides bankrupt.

(it's likely to already have cost both sides in excess of $100k already)

Is that your opinion or a statement of fact?

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#2618725 9-Dec-2020 14:39

concordnz: It's been clearly pointed out that there was a contract.

Can you refer me to where this was clearly pointed out, please? I must have missed it.

concordnz: Sadly I agree with Lias,
The Lawers of both parties will work together to create further conflict (already shown by the BS lodged by the NZTG lawyers - in direct conflict with standing law) extract as much money from both party's until they drive one or both sides bankrupt.

Yes, when disputes cannot be settled between the two parties, lawyers are the winners on the day. Often this is because one party digs their heels in, and decides they are right and will spend as much money as they need to win. Those with deep pockets may aim to out-spend the other party in legal fees and delaying tactics to try and make them give up. Every time I have dealt with a lawyer, they have acted under my instruction or recommended a course of action that I have agreed to. I've never known a lawyer to do whatever he wants and bill me for it.

“Don't believe anything you read on the net. Except this. Well, including this, I suppose.” Douglas Adams

evnafets

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#2618755 9-Dec-2020 15:43

I think I see the source of the confusion here:

Smegoff:

"Sale and purchase agreements were never completed. Promises of shares and directorships in NZTG HB were never issued."

- Interpretation of the word "completed"

- Does "issued" relate to the "Promises" or the "shares"?

It could be interpreted to read "Sale and purchase agreements were not finalized and so were never in place. Promises were never issued."

I believe the intended interpretation is

"Sale and purchase agreements were never fully executed. The promised shares and directorship in NZTG HB did not come through"

Referencing one of those court documents:

https://www.employmentcourt.govt.nz/assets/Documents/Decisions/2020-NZEmpC-172-NZ-Technology-Group-Hawkes-Bay-Ltd-v-Flashoff-No-2.pdf

Agreements for sale and purchase(ASPs) were entered into, as were independent employment agreements between NZTG and the first four respondents.

So the agreements were in place. But the assertion is that they have not been "completed" - as in they "bought" the business, but never paid for it properly.

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#2618777 9-Dec-2020 15:50

Thank you, @evnafets . That was a great explanation.

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SmegOff

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#2618804 9-Dec-2020 16:37

Correct. The businesses were to be "purchased" after 12mths and shares issues based on an EPITDA formula. The goal posts kept changing and parties couldnt agree. Shares were never issued, and the business owners were never given directorship of the company NZTG HB.

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Dynamic

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#2618809 9-Dec-2020 16:43

I guess that's where agreements where 'you get this much now, and this much top-up after 12 months performance numbers based on this agreed formula' might work well. You have something concrete on Day 1. There is a little reshuffling of the deck chairs in the future, but it should only be minor.

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SmegOff

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#2618810 9-Dec-2020 16:44

This will be available from the employment court rulings shortly, however attached is the judgement with explainations.

https://www.employmentcourt.govt.nz/judgments/decisions/?Filter_Jurisdiction=17&Year=2020&Month=12

https://drive.google.com/file/d/137w76H3quaGC574guJSKh4qr_0QvIw0v/view?usp=sharing

Handle9

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#2618813 9-Dec-2020 16:47

Dynamic:

concordnz: Sadly I agree with Lias,

The Lawers of both parties will work together to create further conflict (already shown by the BS lodged by the NZTG lawyers - in direct conflict with standing law) extract as much money from both party's until they drive one or both sides bankrupt.

Yes, when disputes cannot be settled between the two parties, lawyers are the winners on the day. Often this is because one party digs their heels in, and decides they are right and will spend as much money as they need to win. Those with deep pockets may aim to out-spend the other party in legal fees and delaying tactics to try and make them give up. Every time I have dealt with a lawyer, they have acted under my instruction or recommended a course of action that I have agreed to. I've never known a lawyer to do whatever he wants and bill me for it.

Yip. It's fun to blame lawyers but this sort of crap is caused by people either ignoring the law and contracts or being bush lawyers and trying to make up interpretations that suit them. The lawyers are the one who have to clean up the mess.

Every lawyer I've dealt with when there are commercial conflicts asks "Can you solve this without me?" They know that it's going to be costly and don't want you as their client to waste a ton of cash.

Just like any group in society there's good lawyers and bad lawyers but the majority are just normal people trying to do the best job they can.

tripper1000

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#2620100 11-Dec-2020 13:43

What we already know, but the update has finally made it into Stuff:

https://www.stuff.co.nz/business/123672197/employees-who-walked-out-and-started-rival-company-may-have-a-case--judge

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