'And the papers want to know whose shirts you wear'

The bankrupt who flew (almost) too close to the sun

“The facts of this case are, to my mind, unique,” associate judge Owen Paulsen said, about a recent case before the High Court of Dunedin earlier this month.

Micheal Craig Scott

He was not not wrong.

That case involved a former Dunedin man, Michael Craig Scott, who is also known as Makoure (and sometimes as Makouri) Scott. He is pictured, suitably space-like, in the above photo.

This is what I know about Scott, thanks to his website:

• In my early 20’s I was a sponsored extreme skier and heli-ski guide.

• Sadly, a serious accident at Treble Cone, Wanaka ended that.

• Became an artist and also worked in art department during Lord of the Rings.

• Has produced works (now held in collections) throughout Europe, Canada, USA, South America, Australasia, Carribbean, Indonesia, Asia, Middle East and New Zealand.

• I've recently been fortunate enough to exchange an oil painting from my 'Synapse' series for an original Picasso.

Scott was officially adjudicated bankrupt in the Dunedin High Court on April 23, 2012.

That was just the beginning.

A key part of the decision, which was released this month, involved Scott not providing his statement of affairs to the Official Assignee, who effectively takes over the financial affairs of a bankruptcy, collecting and selling assets to pay creditors.

Turns out the Official Assignee did not get that information from Scott until March 2021, and took an official position that due to that late response he wouldn't be discharged from bankruptcy until March 2024 - three years after he provided the information.

But Scott applied for a discharge from that bankruptcy, while the Official Assignee did not oppose any decision from the court.

And so a decision, under the Insolvency Act 2006, led to a hearing on May 4.

While the Official Assignee took no position, the same could not be said for two creditors who opposed the move.

That led to a request for the now Australian-based Scott to appear at the hearing via audiovisual (AVL) link, a request that was declined by his counsel as Scott had no access to AVL facilities. In addition, he had no plans to return to New Zealand until his matter was resolved, the decision noted.

Paulsen noted the length of time the matter had been before the courts, adding there “is no certainty that Mr Scott will ever make himself available for examination”.

Scott’s counsel argued that he had indeed filed a statement of affairs with the Official Assignee, he had not earned any other income other than benefit payments nor had any other assets.

Paulsen noted that the case appeared to be a “fait accompli” as the Official Assignee did not oppose.

“This is not the case.”

He noted the information provided by Scott was just eight short paragraphs, which mirrored the words of the application, but crucially did not provide sufficient information to support the ruling he sought.

Check out this timeline from the decision:

• September 2011: The Bank of New Zealand obtains a summary judgement against Scott for $482,926.66.

• December 2011: BNZ sells his Careys Bay Property.

• February 2012: BNZ applies to make Scott bankrupt.

• March 2012: Application on impending bankruptcy served on Scott.

• April 2012: Court makes order adjudicating Scott bankrupt. Scott did not appear at the hearing.

• April 2012: A week later the Official Assignee sent a letter to Scott asking him to file a statement of affairs. He was now living in the UK.

• May 2012: A request via email was also sent. 

• February 2013: A call was made to Scott, and a message urging him to make contact was left.

• August 2013: The Official Assignee again emailed Scott, and his lawyer, and said he would remain bankrupt indefinitely unless the statement of affairs was returned.

• January 2015: It sends another letter, outlining consequences. Later that month the Official Assignee closes the administration of the estate.

• May 2019: Scott's lawyer contacted the Official Assignee, which supplies a blank statement of affairs form.

• December 2020: Scott complains to the Official Assignee about his continued bankruptcy.

• February 2021: Scott claims he already completed a statement, which was denied by Official Assignee. Later that month Scott finally sends a statement of position form (it is dated August 2012).

• July 2022: Scott files an application seeking an order ‘annulling’ the order declaring him bankrupt on April 23, 2021.

• August 2022: The judge orders a report from the Official Assignee.

This is where it gets interesting. That report, which was filed on September 14, 2022, outlines that claims filed in Scott's bankruptcy totalled $673,184.63.

Original artworks and skis were sold at auction by the Official Assignee, but netted only $3,114.80.

And this is where it gets really interesting.

Virgin Galactic transferred USD$100,000 into Scott's account for a commercial flight he had paid for. That was to be on the first commercial space flight

Wait. What?

If you don’t know, Virgin Galactic is the space company founded in 2004 by Sir Richard Branson. His plan was for a rocketship that would take eight people – two pilots and six passengers – into the lower limits of space. However the ambitious project hit a major snag when the VSS Enterprise crashed into a Californian desert in 2014.

Overseas media reports that the next spaceflight could be on Thursday, but the overseas-based Scott was not likely to be one of those passengers,

This is from Scott himself, from his own website:

Kia ora,

I'm Makouri Scott.

I come from Aotearoa New Zealand ... Land of the long white cloud.

I’m a photographer, painter and environmental artist who has travelled and created internationally for over 20 years. I aim to be the first professional artist in space when, as a founding 100 member, Virgin Galactic takes off in 2011. My seat is booked and I'm ready for take off.

In the meantime, I have plenty to be getting on with working predominantly in my studio in Otago New Zealand. Art is the only language that makes any real sense to me...when I'm working in the studio time stands still and I feel extremely chilled.

Being an artist enables me to be incredibly free ... I don't have to answer to anyone and I can work anywhere in the world I choose.

Kia Kaha

And this is from a Q & A from the same website:

What is your mission?

The mission is to be the first professional artist to travel into space specifically to create art.

How do you feel being the first professional artist in space?

It's all rather humbling but starting to feel a bit of pressure to be honest.

Tell us how this came about?

I was snowboarding for the season in Canada at the time and heard a whisper about the Virgin Galactic project ... I flicked Sir Richard an email offering to donate a painting to help decorate the rocket, thinking it would be cool to have one of my paintings in a spaceship.

He got back to me about 6 weeks later when I was diving in the carribbean inviting me to meet with his team when next I was in London. By the time I got to town I started wondering if they had any spare seats ! VG loved my paintings and I proceeded to make one of the very first space bookings

Why are you doing it?

My main goal is to raise awareness and funds for various environmental / ecological initiatives ... I'm also looking forward to the adrenalin rush !

What preparations are you making?

Just trying to live each day as if it were my last.

How much training do you have to go through?

Initially there is a 3 day nastar space training intensive which I completed last year and we will undergo another round prior to leaving the planet. But in the meantime I will be mountain biking, diving and surfing to keep myself in shape.

How did you raise the money to go?

It took me 3 years to save up the money via selling my paintings.

How fit do you have to be to make the journey?

You have to be pretty fit in general due to the g forces you are exposed to at re-entry speeds of over 2500 miles per hour.

Are you nervous? Second thoughts?

I'm nervous about getting some form of creative block but generally very excited about the mission.

What are your plans for when you return?

I'm planning on creating a series of paintings and exhibiting them on a global tour.

That never happened though – the global tour or the space trip – and the money was later refunded.

But of the US$100,000 refunded from his ‘space’ ticket, Scott is believed to have spent all but $892.90 between July 2012 and December 2012. Check the timeline above, it is important.

He also had two trusts, one of which was involved in the selling of the mortgagee property.

Here is a 2019 picture of the house, which sold that year for $576,441:

Meanwhile, Scott did not provide information on his other trust, while previous claims he had valuable artwork led nowhere (remember that Picasso!).

The decision noted that Scott had left New Zealand when he was bankrupted and had not returned, however he wanted to return home to New Zealand, just not as a bankrupt.

Under the Insolvency Act, bankrupts were automatically discharged for three years from the date of adjudication, generally this means from the date they file their statement of affairs and not when they are adjudicated bankrupt. That was effectively a move to encourage bankrupts to file quickly. If you want to learn more, check this out.

Paulsen was satisfied that Scott did not file a statement of affairs over a decade ago.

But if it had been filed it would not have been accepted due to Scott, spending almost US $100,000 from his refunded space flight while he lived in the U.K

Paulsen noted there was nothing stopping the self-employed artist from returning to New Zealand, and as a bankrupt would not stop him from getting work.

The decision noted that Scott had given no reason for his bankruptcy, and maintains his family estate was sold unlawfully by the bank.

It went further, noting Scott had said he was on a benefit and had no savings or assets, however no evidence of his position was provided.

“By absenting himself from New Zealand for the entire period of his bankruptcy, Mr Scott has not been subject to the bankruptcy regime or needed to observe any of these restrictions upon his conduct.”

Paulsen noted it was not desirable that a bankruptcy continue for such an extended period. If Scott had simply overlooked his obligation to file a statement of affairs but otherwise complied with his obligations, he would have had no hesitation in granting the application.

But that was not the case here, and he dismissed his application.

I’ll keep you updated.

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I’ve probably written enough this week, thanks again for subscribing.

ICYMI. I wrote a story about H & J Smith, which was on Stuff on Saturday, and you can read that here.

I was down home on Tuesday for an uncle’s funeral, and had time to meet a mate at the Copper Kettle and grabbed these few quick photos.

I also wrote about what is happening at Waipori Falls Village, have a read before I file a follow-up. It will be a good one.

I wrote a little story about a mysterious photographer donating a picture of a street identity at a local Port Chalmers Art Gallery, that story got picked up by RNZ and I see the auction is over $1100. Great stuff.

Lastly, I’d like to finish with one of my favourite tracks, Heavy 33 by The Verlaines. I played this while driving back from the funeral last night.

This song is from the AIDS-benefit compilation No Alternative that came out in the 90s. Not only did it feature the Beastie Boys, Nirvana, Patti Smith, Pavement and the Smashing Pumpkins, but it had not just one but two (TWO) Dunedin bands, and also a cover of The Verlaines’ Joed Out.

The other song is Brittle by Straitjacket Fits, which blows anything from the above bands out of the water.

Have a listen.

Thanks.