Mike Pero can’t afford to return $2.3m
High Court reprieve for property entreprenueur who overpaid himself
Mike Pero says he can’t afford to pay back the $2.3 million that he overpaid himself at the real estate business that bears his name.
And the Christchurch-based entrepreneur has been given a reprieve by the High Court’s Justice Mary Peters, who recently put a halt on orders for him to return the funds.
Pero is embroiled in a long running legal dispute with Mike Pero Mortgages, which he founded but no longer owns. Both, however, are coowners of Mike Pero Real Estate.
Pero is the chief executive of that nationwide real estate network and last year was found by the High Court to have given himself a pay rise without his co-owner’s approval.
Pero and another company he controls was ordered to pay back all money they received in excess of $200,000 a year.
The real estate boss, according to the court, 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. That was later calculated as being at $2.38m once accrued interest is taken into account. Pero and Mike Pero Mortgages cannot agree how the debt should be repaid. Pero says that he doesn’t have the ability to pay back the amount right now.
He says 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. Pero alleged that Mike Pero Mortgages won’t allow a dividend to be paid so it can acquire shares off him in the real estate business for less than they are worth.
Pero has launched separate legal action to determine whether or not a dividend should be paid and last month Justice Mary Peters agreed to put a stop on Mike Pero Mortgages’ ability to enforce its debt until that matter has been resolved. Justice Mary Peters
Any sale of Pero’s shares in the real estate firm would reduce his interest to less than 50 per cent.
The judge said she accepted it may be impossible to restore it if the separate action over the dividend is successful.
While Mike Pero Real Estate should not have to wait for the funds, it did not urgently need the $2.3m back and there was no risk of a shortfall to the company if Pero’s legal fight over the dividend was unsuccessful, Justice Peters said. “I am not persuaded there has been undue delay,” she said. The judge agreed to grant a stay over the enforcing of the debt until September.