Receivers in push to bankrupt dying Belgrave Finance executive

Crown lawyers are seeking a formal update on Raymond Tasman Schofield's condition, which is expected within the next four months. Photo / Thinkstock

The receivers of Belgrave Finance are trying to bankrupt the terminally ill property developer who controlled the company, despite having doubts it will yield money for out-of-pocket investors a judge said were victims of his "dishonest conduct".

Raymond Tasman Schofield was charged alongside Belgrave directors Stephen Smith and Shane Buckley in a case taken by both the Serious Fraud Office and the Financial Markets Authority.

While Smith and Buckley were convicted and jailed for fraud, Schofield was granted a stay of proceedings on the charges in December 2012 because he is terminally ill.

Crown lawyers are seeking a formal update on Schofield's condition, which is expected within the next four months.

The hold on the criminal charges, however, did not stop Belgrave's receivers targeting Schofield with civil action.

In a judgment last September, Justice John Fogarty said Schofield went to "great detail to conceal his role" and that he structured the purchase of Belgrave shares to avoid being detected under the related-party restrictions in the company's trust deed.

The receivers alleged before Justice Fogarty that Schofield, Buckley and Smith operated a related-party lending scheme under which millions of dollars were advanced to Schofield-linked entities.

The judge, in his decision, said the main reason Schofield acquired Belgrave "was to access depositors' funds by way of hidden related party loans".

"The lenders to Belgrave are the victims of his dishonest conduct," Justice Fogarty said.

The receivers were awarded judgment against Schofield for $8.6 million, as well as interest on this amount.

According to their latest report filed with the Companies Office, KordaMentha's Grant Graham said the receivers were pursuing a claim to bankrupt Schofield.

"We are not confident this will result in further returns to investors but it is appropriate to submit him to the scrutiny of the bankruptcy process," he said. Belgrave collapsed in 2008, owing around 1000 investors more than $20 million.

They have got back less than 20 per cent of their investment and, as of last month, were still owed around $17 million.