Filmmaker Peter Jacksons former employee who was jailed for fraud has now been made bankrupt.
Since Eugene John DeMarco was released from prison in late September 2020, he lost a civil case over misrepresentations made when he was trying to sell his house overlooking Karaka Bay, Wellington.
He kept a $120,000 deposit even though the couple buying the house for $1.2 million validly cancelled the deal when they learned the house had weathertightness issues, contrary to DeMarcos representations made directly or through others.
DeMarco did not pay the courts award to the couple which, with costs, swelled to $323,441, from the main case and another $6811.50 costs from a preliminary issue.
READ MORE:* Real estate deal gone bad: Offer to settle $323,441.53 debt for $5* Flyer’s wings clipped in defence of filmmaker Jackson’s civil claim * Vintage Aviator fraudster Eugene DeMarco to be freed, Parole Board decides
They applied to have him made bankrupt and Associate Judge Kenneth Johnston made the order in a decision issued late on Wednesday from the High Court in Wellington.
An appeal was planned, DeMarcos former lawyer indicated in court.
DeMarco had wanted the bankruptcy case delayed while he appealed against the court decision on which it was based.
The judge said at this stage there was no appeal, and if one was filed it would face a “high hurdle.
The creditors had waited long enough, and shouldnt have to wait to see if DeMarco could mount a challenge to the debts.
Sir Peter Jackson and others have an outstanding civil claim against DeMarco. (File photo)
There was evidence the creditors could repay the money if the judgment was reversed on appeal.
While DeMarco said he could pay his debts, he had not provided information to back that up, the judge said.
News that the bankruptcy decision was imminent threw a legal spanner into the works of a hearing underway at the High Court in Wellington on Wednesday.
In the normal course of events bankruptcy would also stop any court action to recover debts.
DeMarco stood trial on fraud charges and was sentenced to two years and five months jail. (File photo)
The hearing is due to resume on Friday to discuss the bankruptcy.
DeMarco is facing a claim to recover at least $2 million allegedly lost by The Vintage Aviator company where he used to be production manager, and a trust with trustees Jackson, his personal and business partner Dame Fran Walsh, and their collaborator Philippa Boyens.
They have sued DeMarco and the Old Stick and Rudder Company, of which DeMarco is recorded as the sole shareholder. DeMarco was a pilot with expertise in vintage aircraft.
Some of the claim was based on frauds DeMarco was convicted of at a jury trial in 2019. The civil case was originally to be heard in July 2019 but was delayed while the criminal case proceeded.
After DeMarco left, The Vintage Aviator was investigated, temporarily halting part of its operation. (File photo)
The lawyer for the Jackson parties, Bruce Scott, said on Wednesday there was now an issue of justice for the victims and the civil case should be not be further delayed.
Other parts of the claim resulted from an investigation into The Vintage Aviators affairs after DeMarco left. That included a deal DeMarco was accused of entering into with a United Kingdom trust which has led to a liability for the company of about $1m.
Its also alleged DeMarco sold parts that belonged to the company, and kept the proceeds.
DeMarco said he was still owed money from The Vintage Aviator.
A judge at the High Court in Wellington was told that DeMarco was attempting to revive his appeal against the convictions.
DeMarco when he worked at the Vintage Aviator. (File photo)
The Official Assignee now controls DeMarcos financial affairs.
While the action against DeMarco was on hold pending decisions from the Official Assignee and the court, Justice Christine Grice dismissed the Old Stick & Rudders attempts to stall the proceedings while past decisions relating to them were appealed.
Due to be heard at the same time as the Jackson case was a claim from a former friend, Oliver Wulff who said DeMarco broke a US$500,000 agreement over a valuable old plane and shares in a company.
Jackson and Wulff are both aviation buffs.
During Wednesdays hearing DeMarcos lawyer, Seth Fraser, said the ramifications of the civil claims were huge for DeMarco because two rare and valuable World War II planes were potentially at stake.
Wulff claimed a Curtiss P-40E Kittyhawk, and Fraser said Jackson wanted to establish a debt, that with accruing interest, would give him control of a Corsair.
Together the planes might be worth as much as $7m, Fraser said.