The Lost Foyster Fortune
The Sun Herald
Sunday January 26, 1992
THE four "Fabulous Foyster" brothers were solemnly gathered last month in a North Sydney solicitor's office.
The business at hand was nasty. They were there to say goodbye to a bit of paradise.
John, Mark and Clive were voting on the financial future of brother Lloyd, who had gone bust in a big way.
Lloyd's big dream, the Country Paradise Resort tourist complex at Mudgee, 300km west of Sydney, had gone into receivership last May.
He had debts of more than $11 million. Now his creditors were meeting to decide his fate - but it was the family who effectively had the last word.
Lloyd told his creditors the now familiar ex-millionaire's sad tale of hard times and vanished assets.
He said he was reduced to living on a Commonwealth invalid pension of $304 a fortnight.
The former mogul asserted he had, at most, only $100 in a local bank account. The once ever-present leased Mercedes had gone back to never-never land.
But the real symbol of his fall from the legions of the rich was that there was only $1,250 cash left in his Swiss bank account.
So the story went.
Mudgee accountant Shirley Stanley attended the meeting as the representative of creditors from the busy central west NSW town.
"I felt so sorry for the man, he just looked terrible," Mrs Stanley said. "He really is a broken man."
Lloyd, who now lives at Tweed Heads in a house his brothers own, told the meeting he had received no salary from the Country Paradise Resort. The family had provided loans just to keep it going as long as possible.
He also assured the meeting he had never "stashed" any money away or had"lived the life of Riley".
"By the way he was dressed I could believe it," Mrs Stanley said.
However, some of the creditors, including the two major non-family unsecured creditors, have expressed severe reservations about the whole process which has been undertaken to deal with Lloyd's debts.
"The whole system is wrong," said angry creditor Geoff Taylor, managing director of Health and Hydraulic Systems, who said Lloyd owed him $38,000.
Eric Frank, managing director of Quality Cafe and Club Equipment, said he had a pretty cynical view of the meeting, which involved Part 10 of the Bankruptcy Act.
Mr Frank, who is owed $7,000, said he did not think any of the questioning of Lloyd Foyster's affairs at the meeting was very pertinent.
Tom Colless, managing director of Colless's Food, Leura, said he had received a very "alarming" report back from his representative at the creditor's meeting.
Mr Colless, who is owed $20,000, said: "I'm very hostile about the whole process."
His representative, Frank Brinley, of Manettas Seafoods, had been "aghast"at the way the meeting had been carried out, Mr Colless said.
LLOYD Foyster's Country Prop erties Pty Ltd was placed into receivership on May 6, 1991, on application of the ANZ Bank, which was owed more than $10 million in secured debts.
Steve Sherman, from the receivers Ferrier Hodgson, said the Foyster family also had a second mortgage on the property.
Lloyd also owed the Deputy Commissioner of Taxation more than $300,000, Mr Sherman said.
He would be providing the Australian Securities Commission with a full report by the end of this month.
The small creditors, who are owed a reasonably modest total of $115,000, received letters last November informing them of the creditors' meeting to consider the Part 10 proposal.
The letters had been written by a Brisbane tax law firm, Keith H Henley, and the meeting was to take place at the offices of chartered accountants Hall Chadwick on December 17. On the eve of the meeting, an article appeared in a Sydney paper, written by Stephen Boothe, a registered trustee with Hall Chadwick, outlining the benefits of Part 10-in particular, that it prevented a person losing everything to his creditors.
According to Mr Boothe, some of Part 10's benefits include not having to disclose you are a "Part 10" to creditors when you want to borrow money, still being able to go overseas and avoiding the stigma of bankruptcy.
Creditors also cannot take legal action to recover the debt once the Part 10 has been approved by the Federal Court.
"It's a quick way out of financial trouble. Part 10 doesn't last like bankruptcy, which is over a three-year period, and it is especially good for young people or older people who want to retire," Mr Boothe said.
At the December 17 meeting, a proposal was put by Peter Henley, of Keith H Henley, to place Lloyd Foyster's affair under a registered trustee, John Green, of Hall Chadwick, under a Part 10 deed of assignation.
Lloyd claimed his total assets were $81,350. Details of the assets of Country Properties Pty Ltd, his late father's estate, securities and other properties were listed as "unknown".
Because the family had the vast majority of the unsecured debt-$1.3 million-and the majority of votes, including important proxies, the Part 10 proposal was passed and Lloyd Foyster was not made bankrupt as Mr Taylor and some other creditors wanted.
As a result, Mr Taylor estimated, he would only get paid about $600 of his$38,000 debt at the end of two months. "Three-fifths or five-eights of stuff all," he said.
"The brothers have saved him by saying he owes them money-and it can't be proved he doesn't," Mr Taylor said.
"In other words we got blown out of the water. They controlled the major part of the debt."
Tom Colless was equally upset about the turn of events.
"The way it is now, the family has a lot of unsecured money in the company and they are looking after their own interests.
"I think we will not get much at all."
Mr Colless was particularly upset because the weekend before Lloyd went bust, he had let Lloyd have $10,000 worth of stock for a Rotary convention on a promise the bill would be paid on the Monday.
"On the Tuesday we walked in at 9am and he had gone into bankruptcy as of that moment," he said.
Lloyd did not want to discuss the situation with The Sun-Herald at this stage and neither did his trustee, John Green.
THINGS were very much dif ferent for Lloyd Foyster and his family in May 1969. The family sold their majority shares in two sand-mining companies for$13.5 million-about $80 million at today's value.
The Foyster family regally celebrated with champagne and brandy in the old Hotel Australia, then Sydney's top pub.
They booked four luxury suites on the eighth and ninth floors at a cost of$220 a day. Lloyd occupied suite 905.
The family's odyssey of millions had begun on a north coast NSW beach in 1947.
Patriach John Foyster sen recognised a black streak in the pebbly sands as rutile - the source of titanium.
With the incredible expansion of the space industry, the Foyster fortune began to multiply out of sight.
But it was thoroughbred horses which first thrust the family into the public spotlight in the late 1960s.
John sen, Lloyd and John jun went into partnership in 1967 and two years later were estimated to have spent nearly $2 million on thoroughbreds in Australia, New Zealand and England.
Lloyd had also bought Gooree, a rundown property near Mudgee, which he transformed into one of the best pastoral holdings in the State, featuring a private racecourse larger than Randwick.
His philosophy was simple - "if you want the best, you've got to pay the most".
They engaged all the top trainers, such as Bart Cummings, Jack Denham, Tommy Smith and Neville Begg.
The magnitude of the family wealth can be gauged by the fact that Clive Foyster built his own town in Cape York, near Cooktown. He called it Lakeland and it was near Hell's Gate, the graveyard of countless Chinese prospectors.
In April 1970, Queensland Governor Sir Alan Mansfield officially dedicated the town, which was built to serve Clive's enormous 500sq/km property.
The town featured about a dozen houses, a school, motel and caravan park. Clive cleared 13,000 hectares of scrub, built 14 dams and laid 280km of road.
But the cruel north had other ideas and he was declared bankrupt in November 1975, blaming a blight of army worms for ruining $2.7 million worth of crops.
During the 1970s, the three brothers concentrated on breeding and racing -Lloyd at his 2,000ha Gooree Stud, John at his nearby 465ha Guntawang stud, outside Gulgong, and Mark at his 530ha Balfour Stud, at Jerrys Plains in the Hunter Valley.
And of course, there were the family horses, some of the biggest names of the era - Planet Kingdom, Ming Dynasty, John's Hope, King Apollo, Mighty Kingdom and many more.
Ming Dynasty became the subject of a $10,000 Supreme Court ownership battle between Lloyd and his former wife, Jacqueline, after the horse won the 1977 Caulfield Cup.
The acrimonious relationship between Lloyd and Jacqueline grabbed the headlines in 1983 when she appeared in Castlereagh St Court after flushing a$40,200 ring down a bank toilet.
Jacqueline pleaded guilty in Castlereagh St Court to hindering and assaulting police when they tried to execute a search warrant.
Lloyd had complained to police that his ex-wife had the ring in a safe-custody envelope at the Castlereagh St branch of the ANZ Bank. He believed the ring had been stolen in 1981.
While inspecting the envelope with Lloyd, the court was told, Jacqueline had grabbed it and "ran into the ladies' toilet, locked herself in a cubicle and flushed the envelope down the toilet".
The charges against Jacqueline were dismissed but the ring had not been found.
In 1978, Lloyd decided to sell off most of his horses and then in 1979 sold Gooree in the beautiful Cudgegong Valley to Eduardo Cojuangco, Philippines President Ferdinand Marcos' right hand man, for $1.5 million.
In July 1987, Bondoro, a shelf company founded by Brian Yuill - head of the now-collapsed Spedley Group - bought John Foyster's Guntawang property for$3.1 million.
And the family came full circle with Mark Foyster also selling his beloved Balfour property.
DURING the sec ond half of the 1980s, Lloyd's dream of the Country Paradise Resort began to take shape.
Building began in 1987 and 74 units, a function centre, convention hall and indoor swimming pool were completed.
In January 1990, Lloyd outlined a grand expansion plan, including a golf course, trout farm and a menagerie of exotic animals, including zebras.
He said the resort would put Mudgee on the map "as a potential drawcard for international tourists" featuring an exotic menagerie.
"I like to develop things and experience the achievement," Lloyd said. "But at the end of the day, I like to drift away and try something else."
With his dream shattered and his paradise lost, Lloyd has gone back to the NSW North Coast, where it all began for the Foyster family in the 1940s.
© 1992 The Sun Herald
