Bankruptcy stared me in the face, but one thought kept me calm; soon I'd be too poor to need an anti-theft alarm.

- Gina Rothfels
 

Ruth and Jeff Hatch on Board Their Boat, Lady Fair

Forest Trust Collapse Forces Entrepreneur to Liquidate

by Deborah Hill

Wellington-based computer network specialist Loka calls it a day

They battled high seas and bureaucratic headaches to come here and now face losing both their life savings and the technology company they built from scratch.  But US entrepreneurial emigres Ruth and Jeff Hatch still love New Zealand.  Their company, Loka, secured a string of high-profile contracts since winning its first as a virtual unknown for the New Zealand Police in 1995.  But this week the couple announced they had reluctantly chosen to sell part of the successful business to international technology giant Anite Networks and put the rest into liquidation.

The Hatches' cash flow problems arose as a result of losing half a million dollars in the collapse of Flat Rock Forests Trust - the investment they made in order to become New Zealanders.  Despite their struggles, the Hatches rave about the advantages of the laidback New Zealand lifestyle - away from the violence and aggression their family experienced in the US.

In 1993 the couple and their two sons motored 11,000 km from San Francisco to Wellington on their 22 metre launch, Lady Fair.  They had just sold their successful computer software business and had originally intended to buy a hotel in Washington State with the payout.  However, they enjoyed a holiday touring the North Island so much they changed their minds, swapped US real estate for the Lady Fair and chose to settle here.  "We were totally in love with New Zealand," said Mrs Hatch.

The family still live on their boat at Wellington's Chaffers Marina.

With their specialist technology skills and financial backing they seem like model immigrants but the Hatches have had to overcome many obstacles to make New Zealand their permanent home.  Mrs Hatch has turned the lengthy and complicated process into a 750-page, as yet unpublished, manuscript Chasing the Rainbow.

First, because the Hatches had owned their boat for less than a year in 1993, they were told they would owe a third of the value of the boat in combined customs duty and tax if they stayed in New Zealand - up to $250,000.  That meant the family left the country when their visitors' permits expired.  They returned late 1994, this time for good, but their battle wasn't over yet.  To qualify as business migrants the family went through a laborious screening process.  As part of that process they made an investment of $500,000 through, New Zealand Development Trust in the Flat Rock Forests Trust, a New Zealand government "qualified" investment.

It is that investment decision which has come back to sting them.  Last month receivers were called into Flat Rock Forests Trust by Countrywide Bank and legal action by disgruntled investors is now pending (The National Business Review - February 27, 1998).  Mrs Hatch said at that time they handed over the money she thought the trust was a quasi-government investment because of information contained in the prospectus they were given.  They were told their funds were guaranteed by the trustee.  They were advised by the Wellington Chamber of Commerce to call the New Zealand Enterprise Board.  The trust was promoted to the Hatches by a past president of the chamber, Stephen Reidy, who also became chairman of Mr and Mrs Hatch's company Loka until last December.

The Hatches are watching the receivers' action with interest.

Meanwhile as Anite has paid to acquire Loka and attracted its key staff, Mr Hatch is winding up the remainder of the company's affairs.  Then he plans to "hang out his shingle" and look for a technology position.

Source: The National Business Review 9 April 1998

Can you see the stained glass in the picture?  Not very well?  You can go to Cruise Control for a close-up shot...

What's amazing is that, after more than 5 years, we are still awaiting the results of the Serious Fraud Office investigation.  The wheels of justice grind slowly...

For news articles on the Flat Rock Forests Trust, forestry, the Serious Fraud Office, one immigrant family's experiences, immigration specialists, fraud, juries, logging, and more, pressing the "Up" key below will take you to the Table of Contents for this News section.  Or you may wish to visit the Forestry Trust Table of Contents to read how a unit trust went bust.  Or the Topics Table of Contents which offers a different approach to lots of topics - among them poisonous insects, eating dogs, what's addictive, training vs teaching, tornados, unusual flying machines, humour, wearable computers, IQ tests, health, Y chromosomes, share options, New Jersey's positive side, oddities, ageing, burial alternatives, capital punishment, affairs, poverty, McCarthyism, the most beautiful city in the world, neverending work and more...