Mike Pero settles legal case
Mike Pero said he has settled a longrunning legal stoush with the real estate agency that still bears his name.
Pero says he and Mike Pero Mortgages — both 50 per cent shareholders in Mike Pero Real Estate — have resolved their differences and will “work together on the Mike Pero real estate and mortgages businesses, under one unified umbrella”.
Pero founded Mike Pero Mortgages but no longer owns a stake in that business.
The settlement was reached during the final stages of a High Court case that saw Mike Pero Mortgages attempting to claw back $2.2 million (or $2.4m with interest) it says Mike Pero overpaid himself at their jointlyowned real estate business. It will see Mike Pero Mortgages, run by chief executive Mark Collins, increase its shareholding in Mike Pero Real Estate, run by Mike Pero.
Pero told the Herald the deal saw him lower his stake in Mike Pero Real Estate from 50 per cent to 24 per cent as Mortgages raised its holding from 50 per cent to 76 per cent.
He said the deal was not any sort of make-good. “It was for market price; a substantial amount of money,” he said.
He wouldn’t reveal the specific amount.
The deal will also see Mike Pero take an active role in promoting the broader group until at least 2027.
Pero said there was no element of him working off the overpayment. “That’s all been squared away,” he said. “It’s something that’s always made sense. It’s just that we haven’t been talking for years. There will be joint marketing initiatives before Christmas.”
One benefit of the case was that it brought himself, Collins and Sherman Ma — owner of Mortgages’ parent company Liberty Financial — into physical proximity, Pero said.
“We both extended an olive branch at the same time,” he said. “We both thought, ‘this is nuts; we should work together’.”
Once he, Collins and Ma got in a room together it took less than an hour to sketch the broad outline of their settlement, Pero said.
In 2016, a High Court judge found Pero had given himself a pay rise at Mike Pero Real Estate without his coowner’s approval. The real estate boss, according to the judge, increased his salary from $200,000 to $340,000 a year, and also authorised an additional “brand ambassador” payment to himself of $125,000 per annum.
Pero and another company he controls was ordered to pay back all money they received in excess of $200,000 a year. In April, Pero got a reprieve when Justice Mary Peters granted a halt to the repayments.
Pero argued his only asset is his $12.5m worth of shares in Mike Pero Real Estate, which won’t agree to pay out a dividend that would allow him to return the overpayment.
“This is something I have always wanted,” said Pero of the settlement announced yesterday.
“The collaboration of the businesses will present an offering to home buyers that is unrivalled in New Zealand. Under the one umbrella we will be able to help customers buy and sell property, finance the purchase and then also protect their assets through Mike Pero Insurance.
“Ironically the resolution and the new vision for the companies and the brand all came together within an hour of leaving the courtroom. It was the proverbial whiteboard sketch at the end of the boardroom table. In one sense you might liken it to ‘renewing our vows’ — we are now committed to an exciting future with our visions totally aligned,” said Pero.
Collins added: “We have effectively turned a courtroom battle into a fairy-tale ending that will help even more Kiwis achieve their dreams”.