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Litigation heals Mike Pero wounds

Just a few weeks ago they were at each other’s throats in court, but now Mike Pero and Mike Pero Mortgages (MPM) have kissed and made up.

Friday, September 28th 2018, 1:55PM

by Miriam Bell

The Christchurch businessman and his recent legal foe lobbed a surprise curveball on Thursday - announcing they have resolved all their differences.

In a joint statement, Pero and MPM CEO Mark Collins say they are committed to working together on the Mike Pero real estate and mortgages businesses, under one unified umbrella.

The announcement comes after four years of bitter legal wrangling between the business partners, who were 50/50 partners in Mike Pero Real Estate (MPRE).

While the dispute was prompted by Pero’s overpayment of himself back in 2014, by the time the latest proceedings hit the Auckland High Court again, earlier this month, the argument was about whether Pero and the MPM directors were in deadlock.

However, in the midst of those proceedings, it was agreed that a $6.75 million dividend, which had long been sought by Pero, would be paid out to the shareholders.

This put a halt to the proceedings and Thursday’s announcement makes it clear that the situation was not one of deadlock after all.

Rather Pero, who has no holdings in MPM but remains CEO of MPRE, and MPM directors – Collins and Sherman Ma – have been able to patch up their relationship.

Pero says that after he and Ma spent time in the witness box in the recent hearing, they both realised the situation was likely to head down the dispute resolution path with a bid process as the outcome.

That just meant further uncertainty when they all wanted the situation to be resolved and it was this that prompted them to sit down and talk, he says.

“Ironically, the resolution and a new vision for the companies and the brand all came together within an hour of leaving the courtroom.”

The upshot was an agreement whereby Pero sold half of his MPRE shares to MPM – leaving him with a 24% holding and MPM with a 76% holding in the real estate company.

But this, along with the dividend pay-out, has allowed Pero to repay the debt to the Chow brothers he accrued to pay a court judgment.

As part of the agreement, Pero and the MPM directors also developed a new nine year vision for the business which will see Pero actively working to promote the broader group with Collins.

Under the agreement, Pero’s remuneration has been reviewed to reflect the work he does and there will now be six “round the table” board meetings a year.

Pero says he doesn’t feel he has lost control by reducing his share holdings, rather the arrangement now is something he has always wanted.

It was never just about money, it was about the relationship and the break-down in communication which left it on the rocks, he says.

“In one sense you might liken the new agreement to ‘renewing our vows’: we are now committed to an exciting future with our visions totally aligned.

“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.”

Meanwhile, Collins, who is also CEO of Liberty Financial, says they are looking forward to pursuing their common goal of helping even more Kiwis achieve their financial and home ownerships dreams.

“We have effectively turned a courtroom battle into a fairy tale ending that will help even more Kiwis achieve their dreams.”

Read more:

Failed MPM relationship doesn’t mean deadlock 

Mike Pero vs Mike Pero companies – the battle continues 

Tags: court disputes Liberty Mike Pero mortgages

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Finance Direct - - - -
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Kiwibank 5.80 4.60 ▼4.60 ▼4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.65 - - -
Kiwibank Special - 3.85 ▼3.85 ▼3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 4.89 4.99 -
Resimac 5.30 4.86 4.14 4.19
RESIMAC Special - - - -
SBS Bank 5.79 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 3.85 3.85 3.99
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The Co-operative Bank - Owner Occ 5.65 3.89 3.89 4.05
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TSB Bank 5.69 4.45 4.35 4.55
TSB Special - 3.95 3.85 4.05
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Westpac 5.79 4.69 4.79 5.19
Westpac - Offset 5.79 - - -
Westpac Special - 3.85 3.85 4.05
Median 5.80 4.35 4.35 4.19

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