Kim Dotcom's surprise Birthday party at Coatesville mansion.
Kim Dotcom's surprise Birthday party at Coatesville mansion.
Tycoon says he will pay $500,000 owed but claims lack of funds.
Kim Dotcom is facing calls to pay $500,000 in debts by creditors who have watched him appear to embrace again an opulent lifestyle.
The internet tycoon has pledged to pay the money owed by his company Megastuff for the operation of his mansion.
The money has been owed since the January 2012 raid on his mansion by police, which saw him and three others arrested to face extradition to the United States on accusations of copyright violation.
Dotcom told the Herald yesterday he would pay every cent of the debts but didn't currently have the money.
A lack of funds was also cited in the recent exit of Wayne Tempero, Dotcom's longtime bodyguard, who was being paid half of what he had been paid before the raid.
Creditors' frustrations have soared in recent months amid a high-profile marketing campaign for his Good Times album, helicopter trips to the Rhythm and Vines music festival and a weekend at Huka Lodge.
A spreadsheet on the court file dated January 23, 2012 stated there were 80 creditors owed between $69 and $133,916.
Documents lodged with the High Court at Auckland during 2012 show $634,000 of debt was declared by Dotcom's lawyers, who tried to get access to money seized in the raid to pay the debts. Opposition by police kept the money tied up, with the courts accepting in August 2012 that there was no "legal ability" to release Dotcom's restrained funds to pay debts of Megastuff, now called called RSV Holdings.
The courts released just $104,000, which was money held in Megastuff's bank accounts at the time of the raid.
Creditors spoken to by the Herald have pointed to apparent recent indulgences by Dotcom as raising frustration with bills for work at the mansion still unpaid.
West City Electrical's Neil Stratful said he was among many creditors who had not been paid.
Court documents show that amount was $52,027 as of February, 2012.
"Kim has said once this is all dealt with he is wanting to pay every cent to everyone he owes money to. I think morally he wants to put everyone right."
Dotcom's lawyers put a letter from Mr Stratful before the court in 2012, when seeking funds to be released, in which the electrician said he owed money to suppliers for materials used during work at the mansion.
"We now find ourselves in a very uncomfortable situation with creditors to me sending me final demand letters asking for payment."
Mr Stratful said yesterday: "He doesn't want to be shareholder of a company that doesn't pay its bills. He doesn't want to fold and let it fall over."
Donna Richmond, of Auckland Inground Pools, questioned whether Dotcom had the money available now to pay their bill.
About $5000 of the $5727 bill was still outstanding after $673.54 was released by the courts.
Documents lodged with the High Court at Auckland during 2012 show $634,000 of debt was declared by Kim Dotcom's lawyers.
She said it was galling to hear Dotcom declaring he would like to support Team New Zealand when his company still owed $5000.
"When we heard that bold claim, we joked that we thought our name should be on the side of the boat. Because it's our money."
Ms Richmond was not prepared to write off the unpaid bill as a bad debt.
"That money could have made all the difference to us when we took a hit during the recession. But it's not about the money, it's about the principle of the matter."
Paul Davis supplied uniforms to the staff at the Dotcom mansion and is owed $1138. The offer of around 10 per cent of the total owed was "completely unacceptable" given Dotcom at one stage was granted a personal monthly allowances from seized funds of $20,000.
"I understand Dotcom cannot be held legally liable for this, there's nothing we can do about it," said Mr Davis. But he said Dotcom had a court-ordered allowance of $20,000 a month from seized funds - money he believed could be used to clear debts.
"We were a relatively small creditor but it irritates me every time I see him on the back of a bus, or on the news, and people saying what a wonderful guy he is."
Robin Humphreys, owner of Garden Aids, said a part payment of $418 from money released from court was made for goods and services supplied to Dotcom's grounds maintenance crew, but he was still owed $3141.
Like many of the other creditors, he said he was a small business owner who had borne the brunt of the economic downturn by making personal financial sacrifices in order to keep their employees in a job.
"We've been out of pocket for two years now. Every time he comes on TV, he gets me going."
Mr Humphreys said Dotcom's lifestyle led him to believe there was sufficient money "and he should just cough up".
Brian Field, from Foley's Water, said he was still owed about $1700 with a payment of $178 made after the court released some funds.
"I haven't heard anything - no correspondence and no phone calls."
He said the firm no longer delivered to the address as the mansion used bore water, which had previously been available but not used. "Every time I drive past there I think they still owe me some money."
Kim Dotcom and with his Aabum Good Times.
Pledge to pay every cent
Kim Dotcom promises to pay his creditors every cent owed but says he hasn't the money to do so now.
"I tried to get all those invoices paid. When we asked the Government to unseize the funds, they refused."
He said Megastuff Ltd was a "separate legal entity" and he could technically walk away from the company (now called RSV Holdings Ltd) and let it collapse. "Legally I don't have any obligation to pay anything - but I feel an obligation to pay."
He said he had offered through an accountant to meet the debt through shares in the new cloud storage site Mega. A plan to float Mega this year was intended to give creditors shares which could be sold once the company went on the sharemarket.
But the plan was stymied when it emerged the creditors would have to pay tax after receiving the shares.
"My position has always been those creditors should be paid. When Mega is listed my family, which owns the shares, [will] settle those obligations."
He did not want to pay some creditors over others and "I am not ... in a position to pay all of them".
He said there were questions about how much money he had with his face on buses promoting his Good Times album and putting on fireworks at a music festival where he performed.
"I have support from investors. The album was to promote Baboom [a music service he is launching]. These things have no connection to the debts I have to these people."
The helicopter he has travelled in was owned by a friend. "Just because people see some picture they don't need to speculate I'm paying for that."
His fortunes "were improving". Mega was growing at 3 per cent each week and was an "extreme success".
Click here for the Herald's full coverage of the Dotcom saga.
