Merlin the Magician and Diamond Joe Gutnick – Magically Insolvent


‘Diamond’ Joe Gutnick’s company insolvent after ‘dishonest’ transactions

The Federal Court has ordered that a company associated with Melbourne business figure “Diamond” Joe Gutnick be wound up and declared insolvent amid allegations of millions of dollars of dishonest related party transactions.

The Federal Court on Wednesday appointed liquidators to the publicly traded mining company Merlin Diamonds Limited after a provisional liquidators’ report showed it had just $1331 in the bank and liabilities of $13 million.

Judge Michael O’Bryan said a liquidator would allow for investigations into a number of inter-company loans, related party transactions and “round robin” payments that “have the appearance of uncommercial and dishonest transactions”.

The Australian Securities and Investments Commission’s had requested a liquidator to be appointed after an investigation into Mr Gutnick, one of Australia’s best-known business figures. The ordained Rabbi was once a regular on the BRW Rich 200 list and a benefactor to many Jewish charities. As president of a stricken Melbourne Football Club during the 1990s, his financial support kept the club alive.

However, The Age and The Sydney Morning Herald revealed in a series of stories in 2019 that ASIC was investigating what happened to $18 million in loans that allegedly saw money flow from publicly listed companies controlled by Mr Gutnick to a private company that he was also closely involved with.

In a scathing judgment on Wednesday, Justice O’Bryan said Merlin “does not appear to take its legal obligations seriously,” had expressed “no contrition” for various corporate transgressions and faced a “strong prima facie case” that it had contravened the Corporations Act, particularly when it came to two related companies called Chabad and Axis.


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Unsurprisingly, as NY AG is Looking for Siphoned Assets, Purdue Pharma Declares Bankruptcy – Forcing Hands…

Purdue Pharma headquarters in Stamford, Conn, shown last week. The company, which makes OxyContin and other drugs, filed court papers in New York on Sunday seeking Chapter 11 bankruptcy protection.
Frank Franklin II/AP

Purdue Pharma, Accused Of Fueling Opioid Crisis, Files For Chapter 11

Purdue Pharma, the maker of OxyContin, filed for Chapter 11 bankruptcy protection Sunday night, just days after striking a settlement with more than 2,000 local governments over its alleged role in creating and sustaining the deadly opioid crisis.

The filing in New York follows the Sackler family agreeing to relinquish ownership of the lucrative company. The family also agreed to provide $3 billion in cash over several years and future revenue from the sale of OxyContin to assist communities hardest hit by the opioid epidemic.

On Sunday, Purdue’s board of directors approved the settlement, which includes 24 state attorneys general who sued the company, accusing it of fueling the nationwide addiction crisis by aggressively marketing OxyContin while downplaying its potential for addiction.

Following Sunday’s bankruptcy filing, the company’s board members said the deal struck with the thousands of state and local governments will provide billions to combat the country’s opioid crisis.

“This settlement framework avoids wasting hundreds of millions of dollars and years on protracted litigation, and instead will provide billions of dollars and critical resources to communities across the country trying to cope with the opioid crisis,” said Steve Miller, chairman of Purdue’s board of directors, in a statement to NPR.

“We will continue to work with state attorneys general and other plaintiff representatives to finalize and implement this agreement as quickly as possible,” he added.

The drugmaker said the value of the settlement is about $10 billion, but 26 states opposed to the deal have contested that estimate, vowing to take the Sackler family to state courts in an attempt to tap into the family’s fortune.

The bankruptcy filing follows a statement by New York’s state attorney general, Letitia James, alleging that investigators discovered nearly $1 billion in wire transfers made by Purdue to Swiss bank accounts — allegedly to shield the family’s wealth from litigation.

Purdue has pointed out that its products were approved by the Federal Drug Administration and that doctors were prescribing them to address patient pain. But the plaintiffs in the suits argue that company officials intensively marketed opioids and downplayed their addictive risks, laying the groundwork for the opioid crisis, which has claimed tens of thousands of lives and is often described as a national emergency.

Purdue Chairman Miller says the company has not admitted any wrongdoing as part of settlement negotiations.

“The resumption of litigation would rapidly diminish all the resources of the company and would be lose-lose-lose all the way around,” he said in the statement. “Whatever people might wish for is not on the table now.”

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$27 Million in Hidden Assets, Israeli Businessman and Trustee

Bankrupt Israeli businessman Eliezer Fishman in court.

Bankrupt Israeli Businessman Hid Over $27 Million in Assets in Europe, Says Trustee

Bankrupt businessman Eliezer Fishman has assets worth up to 100 million shekels stashed away in Europe, held through straw men and foreign companies, alleged the trustee appointed to his assets, attorney Joseph Benkel, in a motion submitted to the Tel Aviv District Court on Monday.

Fishman is currently in the middle of Israel’s largest bankruptcy case, and owes more than 4 billion shekels to creditors, including 3.5 billion shekels to Bank Hapoalim and Bank Leumi. He has sold off 1.5 billion shekels in assets since entering bankruptcy proceedings.

Benkel was drawing on a report compiled for the bankruptcy case by the private investigations company Black Cube. The company’s investigators posed as foreign businessmen, and received an offer to buy the assets from a German attorney, Markus Risa, working on behalf of Fishman. The negotiations involved Fishman’s nephew, Shlomo Katz, a businessman living in Berlin.

The report also mentions another three German citizens, whom Benkel believes to be straw men working on behalf of Fishman.

Benkel alleged that Fishman “is still trying, even after being declared bankrupt, to hide from the trustee and even cash in on his assets in Germany, via trustees, contrary to his obligation to transfer these assets into the bankruptcy fund.”

When Fishman was going through bankruptcy proceedings, several of the companies that Black Cube alleges belong to him tried to change their addresses and management, including “by replacing shareholders and board members who are associated with the Fishman family,” said Benkel. Benkel said he suspected the assets were being held by Katz and the Germans in order to distance them from Fishman.

Black Cube’s investigators contacted Risa, posing as representatives of a Russian oligarch seeking to hide assets in Britain and Russia. In a meeting with him, they detailed his methods for allegedly hiding assets. He allegedly drew examples from Fishman’s bankruptcy case, and came off as very knowledgeable about it.

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Where Have all the Diamonds Gone, Gone to Joe Gutnick Everyone, Where have All the Diamonds Gone.. Long Time Ago

Joe Gutnick appearing at the Federal Court in Melbourne in 2017.

Where has the money gone from ‘Diamond’ Joe Gutnick’s loans?


Australia’s corporate watchdog is investigating what happened to $18 million in loans that saw money flow from publicly listed companies controlled by mining magnate Joseph Gutnick to a private company that he was also closely involved with.

The Australian Securities and Investments Commission has confirmed to The Age and Sydney Morning Herald that it is investigating loans involving the Gutnick-chaired Merlin Diamonds, whose shares have been suspended from trading since October, and a private company called AXIS Consultants.

The centrepoint for the loans drama is Mr Gutnick’s level-one office at 42 Moray Street in Melbourne’s Southbank precinct. It is home to both Merlin Diamonds and AXIS.

Since 2001, AXIS has been integral to Mr Gutnick’s financial dealings. Several of his listed mining companies have contracted AXIS to provide administrative, management and geological services.

Filings with the Australian Securities Exchange show listed companies such as Merlin Diamonds, Top End Minerals (now called Myanmar Metals) have over several years advanced unsecured loans of at least $18 million to AXIS.

Another Gutnick-controlled public company, United States-based Legend International, has loaned AXIS at least $5.6 million.

Unfortunately for the shareholders of the Australian companies, AXIS has proved unwilling or incapable of repaying the bulk of the loans. Most of them have been written off as impairments and are, most likely, unrecoverable.

The terms of these AXIS loans have been extremely kind. “No fixed terms for repayment of loans between the parties, no security has been provided and no interest charged,” is how Merlin Diamonds explained the arrangement in its 2015 annual report.

ASIC investigators are trying to determine if there is any justification for publicly listed companies closely associated with Mr Gutnick making such generous loans to AXIS, a private entity also linked to the businessman.

The next question is why AXIS has not repaid the loans?

The conduit

Mr Gutnick was a long-standing director of AXIS until he declared himself bankrupt in July 2016. But it’s still closely tied to him.

His eldest son, Mordechai Gutnick, and long-time business associate Peter Lee are present AXIS directors. Another loyal ally, David Tyrwhitt, who has worked with Mr Gutnick for more than 20 years, was an AXIS director until October 2017.

Mr Gutnick, his son, Mr Lee and Mr Tyrwhitt, the AXIS directors, have also all appeared as either directors or senior executives at publicly listed companies, including Merlin Diamonds, that have loaned AXIS money over the past six years.

So when the ASX began asking questions of Merlin Diamonds about its AXIS loans in October last year, it was reasonable to presume answers would be forthcoming given the crossover in directors and shared office.

Merlin diamonds is closely linked to Gutnick.
Merlin diamonds is closely linked to Gutnick.

But, remarkably, Merlin Diamonds told the ASX it “does not have access to the financial information of AXIS”.

Unlike the Merlin Diamonds board, or the stock exchange regulator, The Age and SMH have been able to access some of AXIS’s confidential financial information.

It shows that AXIS has operated as a conduit for the transfer of huge sums of money from public companies controlled by Mr Gutnick to other businesses strongly linked to his family.

One AXIS balance sheet from 2014 shows that the publicly owned Merlin Diamonds, Top End Minerals and Legend International between them had loaned more than $12 million to AXIS.

Two more private companies associated with Mr Gutnick had also loaned AXIS $2.3 million

Money in, money out

While the loaned money was flowing from the publicly listed companies into AXIS, even more money was going out of the private company.

As of 2014, several other Gutnick-linked companies borrowed more than $15 million from AXIS. The AXIS balance sheet records a net loss in 2014 of $1.79 million and a $2.5 million gap between its current assets and liabilities.

While it is clear there is plenty of financial detective work for ASIC to do, some investors, while grateful for the regulator’s interest, are perplexed as to why it has taken so long for anyone to act.

“This has been hidden in plain sight for years. The loans, the conflicts of interest and the lack of repayment are all there in the ASX filings,” said one former Gutnick associate who asked not to be named for fear of receiving a writ from a businessman who has in the past sued his own family members.

Then rich-lister Rabbi Joseph Gutnick in his Melbourne office in 2013.
Then rich-lister Rabbi Joseph Gutnick in his Melbourne office in 2013.CREDIT:JESSE MARLOW

Hard times for the chosen one

It is difficult to fathom that the man with two mortgages over his St Kilda East house was just five years ago wealthy enough to be included at the tail end of the BRW richest 200 list with an estimated fortune of $255 million.

Folklore has it that the starting point for Mr Gutnick’s amassing of riches was a prophecy made in the late 1980s by the New York-based spiritual leader of the ultra-orthodox Lubavitch Hasidic movement.

The late Rebbe Menachem Mendel Schneerson foresaw great wealth for Mr Gutnick in the discovery of gold and diamonds in the Australian outback.

The Rebbe’s endorsement of Mr Gutnick’s Australian mining ventures carried enormous weight among ultra-orthodox investors who ploughed money into Gutnick-led ventures. Some won and some lost. Such is the mining game.

By the end of the 1990s, Mr Gutnick was at the peak of his powers. The saviour of his beloved Melbourne Demons, Mr Gutnick and his family travelled by private jet and Rolls-Royce and Bentley cars. They had bodyguards and friends in high places in Australia, the United States and Israel.

No more so than Israeli Prime Minister Benjamin “Bibi” Netanyahu. When Mr Gutnick helped bankroll Mr Netanyahu’s 1996 election campaign, he made an influential friend for life.

Gutnick with Israeli Prime Minister Benjamin Netanyahu in 2001.
Gutnick with Israeli Prime Minister Benjamin Netanyahu in 2001.CREDIT:JOE ARMAO

After experiencing great highs and depressing lows over the next 20 years, everything finally fell apart for Mr Gutnick in 2016 when a $103 million deal between his Legend International company and the Indian Farmers Fertiliser Cooperative came unstuck, resulting in expensive litigation and the businessman’s decision to declare bankruptcy.

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Eddie Lampert ESL Investments – The Demise of Sears: Lampert Owns the Debt and the Equity?


How a hedge fund king’s weird ideas about retail destroyed Sears


It’s been a long, strange trip to bankruptcy court for Sears — and you can thank a brilliant, reclusive and woefully misguided hedge-fund manager for the ride.

The 125-year-old retailer — for decades one of the nation’s iconic corporations, selling everything from TVs to dresses to riding mowers — filed for bankruptcy early Monday, as shoppers fled its increasingly shoddy stores in favor of younger rivals like Walmart and Amazon.

More stunning, however, is the odd saga that Sears has endured for more than a dozen years now. In 2005, a financial prodigy named Eddie Lampert seized control of Sears by merging it with Kmart. For a while, the surprise deal was the talk of Wall Street, with many reckoning that Lampert was destined to become the next Warren Buffett.

Instead, Sears got crippled by Lampert’s bizarre approach to running the Chicago-based company, which included micromanaging it from his mega-mansions in Connecticut and Florida, flitting between flopped retail experiments and flouting the industry’s basic conventions for investing in stores.

“This guy pivoted from being a successful hedge fund manager to running a retail empire,” said Mark Cohen, a former chief executive of Sears Canada who’s now director of retail studies at Columbia Business School. “But he never viewed anyone’s opinion but his own as valuable.”

Now, 56-year-old Lampert is scrambling to salvage 300 locations from what, before his arrival, had spanned more than 3,500 Sears and Kmart stores. Experts disagree whether the aging chains could have thrived on somebody else’s watch, but one thing is clear: Lampert isn’t the genius that many deep-pocketed investors thought he was.

In its early Monday Chapter 11 filing, Sears said it got $300 million from lenders to keep shelves stocked and employees paid through the holidays, but that it was still in talks with Lampert, who stepped down as CEO, to get as much as $300 million more.

In words that rang eerily familiar to longtime followers of Sears, Lampert said his hedge fund “will continue to press forward with the goal of seeing Sears emerge from this process positioned for success.”

The slow-moving train wreck began in 2003, when Lampert startled investors by scooping Kmart out of bankruptcy through an $800 million debt investment. Most had viewed Kmart as hopeless, but Lampert soon cut a deal to sell 70 of its 1,400 stores to Sears and Home Depot for $900 million. Kmart shares leaped, suddenly making Lampert’s $800 million bet worth more than $4 billion.

Lampert — a numbers whiz whose college roommate at Yale was Treasury Secretary Steve Mnuchin, and who only a few years later worked for ex-Treasury Secretary Robert Rubin at Goldman Sachs — was now a Wall Street celebrity. A who’s who of A-list investors — the Tisch family, the Ziff publishing heirs, Michael Dell and Mnuchin — poured into Lampert’s Connecticut-based hedge fund, ESL Investments. David Geffen gushed that he had made more money with Lampert than in all his years as a music mogul.

Notoriously tight-lipped and stingy with interviews, Lampert’s mystique only grew in 2003 when he got kidnapped and held hostage in a motel bathroom for 30 hours before talking his way out of the fix. Just days after he was released by captors on an I-95 exit ramp near ESL’s offices, Lampert was back negotiating the Kmart deal. His next big move: the $12 billion deal in 2005 to buy Sears with Kmart’s surging shares.

Then as now, Sears and Kmart both were among the dingiest, dowdiest and aged retail brands in the US. Yet merged together as Sears Holdings, they quickly became the sexiest story on Wall Street as pundits scrambled to guess Lampert’s thinking. As the new chairman, Lampert nixed quarterly conference calls, instead firing off annual, Buffett-style shareholder letters. Declaring that he worked for investors, not shoppers, Lampert railed against the traditional tenets of retailing, yanking yearly budgets for remodeling and staffing stores that he insisted were wasteful.

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Blue Gold Equities LLC (a/ka/a (Seasons Kosher Grocery Store)) Chapter 11 Filings


Blue Gold Equities LLC
(Seasons Kosher Grocery Stores)
Chapter 11 Bankruptcy Filing
Precedent Research Resources

We Have Utilized Our Industry-Leading Database of Almost Four Million Court Filings From Over 2,750 of the Largest Chapter 11 Bankruptcy Cases Filed Nationwide to Give You a Head Start on Researching This Case


  • The company operates the Seasons chain of kosher grocery stores/supermarkets with approximately eight locations in New York, New Jersey and Maryland.
  • The company also has plans to open an additional location located in Cleveland, Ohio.
  • Seasons’ website is:
  • As of the Petition Date, the Debtors owned assets of approximately $31 million based on book value. 
  • As of the Petition Date, the Debtors had aggregate liabilities of approximately $42 million, including approximately $8.8 million owed to Bank United and approximately $8 million owed to the Consultants. 
  • The Debtors’ revenue for 2018 through the Petition Date is approximately $63 million.
  • In or around November 2017, Consultants commenced an arbitration proceeding in a Beth Din (an arbitration panel governed by Jewish law) to recover the amounts due under the Consulting Agreement. In or around March 2018, the Beth Din issued an award in favor of the Consultants for $8.3 million.
  • When it was not paid, the Consultants moved to confirm the Award and obtained judgment against the Original Operating Entities, Bloom and Gold.
  • In October 2016, Bank United loaned $10 Million to Seasons Corporate LLC and obtained a security interest in all of Corporate’s assets. The Operating Entities guaranteed the Loan on an unsecured basis. Although payments on the Loan were current at the time the Judgment was issued, Bank United declared a default under the Loan, based on the Judgment.
  • As a result of the actions by the Consultants and Bank United, the Company’s cash was dramatically reduced, rendering it unable to keep the store shelves stocked. Suppliers began to require COD payments and attempts to obtain funding to restock the Stores were unsuccessful.
  • The Company has retained Joel Getzler and William Henrich of the firm of GHA as Co- Chief Restructuring Officers (“CRO”) to assist in the development of restructuring options and negotiation of a reorganization plan, oversee and execute the process for the sale of the Debtors’ assets, monitor and manage the Debtors’  operations and cash flow and guide the Debtors through the bankruptcy process, including performing the necessary bankruptcy administration requirements. Messrs. Getzler and Henrich will commence acting as Co-CRO once the Debtors obtain D&O insurance.
  • The Debtors seek authority to enter into the DIP Facility in the total amount of $5.7 million, which will provide the Debtors with access to as much as $4,000,000 during the period of 14 days after entry of the Interim DIP Order in accordance with the Debtors’ Budget. The Debtors negotiated the DIP Documents as part of their larger discussions with the Prepetition Secured Lender and DIP Lender.
  • The DIP Lenders’ willingness to provide the DIP Loan was contingent on the Debtors’ agreement to enter into an Asset Purchase Agreement, pursuant to which
    the DIP Lender has presented a stalking horse bid to acquire certain of the Debtor’s assets, free and clear of liens, claims and encumbrances, for $12 million, subject to higher and better offers.

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