Joe Gutnick settles $305m bankruptcy for less than $1.75m
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Joe Gutnick settles $305m bankruptcy for less than $1.75m

"Diamond" Joe Gutnick has kicked off the shackles of bankruptcy and appears to have made a return to what he knows best, speculative mining ventures in the great Aussie outback.

And true to his wheeling and dealing roots, Gutnick discharged his bankruptcy in June after settling with creditors owed $175 million for an amount that's expected to end up being less than one cent in the dollar.

Joe Gutnick is no longer a bankrupt.

Joe Gutnick is no longer a bankrupt.

Photo: Peter Rae

Gutnick's bankruptcy trustee, Pitcher Partner's Gess Rambaldi, said that while Gutnick disclosed debts of $305 million, "related parties" of Gutnick agreed not to participate under the bankruptcy settlement, which "is likely to result in a dividend to participating creditors of less than one cent in the dollar" to the creditors owed $175 million.

"I recommended that creditors accept the proposal because it is likely to be better than the result from a continued bankruptcy with more certainty and a faster dividend," said Rambaldi who conducted a court examination of Gutnick in April last year to help assess the best options for creditors.

So how did Diamond Joe celebrate his liberation from bankruptcy? Within days, Gutnick began setting up a few companies and putting himself on the boards: Central Australia Gold Pty Ltd, North Australia Gold Pty Ltd, and Mazel Gold Pty Ltd.

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Joe Gutnick. Illustration: John Shakespeare

Joe Gutnick. Illustration: John Shakespeare

So no prizes for guessing where Gutnick's next adventure will be.

Diamond Joe came a cropper in 2016 after a $103 million deal between his company Legend International and the Indian Farmers Fertiliser Cooperative (IFFCO) went south.

IFFCO sued Gutnick and Legend in 2015 to enforce a $US40.4 million ($54 million) debt and won.

The company then tried to bankrupt Gutnick, but he got in first, declaring himself broke. IFFCO found time to grill Gutnick in the Federal Court bankruptcy hearing in April last year.

"I don't believe I was in any financial stress until IFFCO came along with their false claims," was the killer line from Diamond Joe.

Your columnist suspects that IFFCO did not support Gutnick's proposal.

Bolt hole

Scott Morrison's newly appointed Minister for Energy, or "minister for low electricity prices", Angus Taylor, managed to energetically avoid any media questioning after making his first speech in his new job at the Council of Small Business of Australia summit in Melbourne on Thursday.

Energy Minister Angus Taylor with Prime Minister Scott Morrison.

Energy Minister Angus Taylor with Prime Minister Scott Morrison.

Photo: Alex Ellinghausen

Who can blame him. This time last week, he was still Malcolm Turnbull's minister for law and order and cybersecurity - it's a big change.

Mr Taylor refused to answer questions from journalists on the way in to the speech. But he was confronted by a media scrum on his way out, so he high-tailed it to a meeting room in the hotel, where the door was firmly closed.

A COSBOA representative was deployed to tell media that they should leave as the minister would not be answering questions. Said media refused to play ball and opted to wait outside with the minister bunkered down.

After 40 minutes of waiting, the media were told the crafty minister - a Rhodes Scholar - had used a back door from the meeting room to leave the hotel while avoiding these pesky journos.

Let's hope the minister is able to bring the same dogged approach to bringing down energy prices.

One thing we can say for sure is that the minister should be a big fan of Snowy Hydro II. His grandfather headed construction for the original Snowy scheme.

Stormy weather

Beleaguered investment group Blue Sky Alternative Investments was not really in a position to accentuate the positives after what chairman John Kain appropriately described as an “annus horribilis”.

“Our financial result has been dreadful, our reputation has been materially diminished and market sentiment has collapsed.”

We won’t bother with the "glass half full" part of his rallying cry for investors because it is hard to escape the feeling that the hangover ain’t over yet.

The stock has dropped by 80 per cent since Glaucus bombed the stock with its research report in April. Revenue plunged to $24.9 million from $68 million the prior year, and it recorded a loss of $85.6 million compared to a profit of $25.5 million the prior year.

At least Kain was able to crow about the loyalty of Blue Sky chief Kim Morison and his troops, “despite most of them being repeatedly approached by opportunistic recruitment firms with offers of alternative employment”.

What a pity then that Blue Sky reported $9.7 million in “unanticipated costs” including “staff retention”, which obviously wasn't needed.

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald's deputy business editor and online business editor.

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