A long-running court battle has come to an unexpected end—someone dialed the wrong number.
In deep water
A South African property group found itself in hot water when sales of properties in its prestige golf resorts took a dive after the 2008 recession. In 2011, the Pinnacle Point Group was put under liquidation.
Since then a group of former Pinnacle Group directors and executives have been under siege by creditors of the insolvent company, who sued them for R720 million (about $52 million). The plaintiffs included two of the biggest finance banks in South Africa—Absa and Investec.
Lawyers and money
The team of lawyers representing the banks and liquidators wad led by Leonard Katz of ENSafrica (previously Edward Nathan Sonnenbergs), Africas largest law firm. Katz's bio on the firm's website has the tagline “nothing focuses the mind like a liquidation”. According to Noseweek magazine, he has long been known as “Lennie the Liquidator”. By November 2018, liquidators’ legal fees and costs had amounted to R60 million (about $4.4 million).
On 7 November 2018 the entire defence team, representing the ex-Pinnacle group, were having breakfast together in a Cape Town restaurant, preparing for the day's proceedings before Judge Ashley Binns-Ward.
They were reasonably buoyant since the trial had taken a positive turn for the defence. Terence Hatzkilson, one of Katz’s expert witnesses, had his evidence torn to shreds when further witnesses were called to substantiate his expert opinion and instead, ended up contradicting it.
The phone call
During the breakfast, attorney Chris MacRoberts’s cell phone rang. MacRoberts had not yet said a word when all those at the table were silenced by his astounded expression. He listened for sometime before saying, “Lennie, do you know who you are talking to? This is Chris MacRoberts.” Click. The call was over.
“You will not believe it! I’ve just had Leonard Katz on the phone thinking I am Terence Hatzkilson! He did not allow me time to talk. He just launched in with ‘Terence, we are in serious shit. We need more time to deal with IFRS [International Financial Reporting Standards] technical issues. You need to be sick for another day. Get a sick note.’”
When MacRoberts told him who he was talking to, a clearly flustered Katz responded with, “I am sorry, I didn’t know you were sick”.
The silence was broken by long, raucous laughter. But they soon got down to business, thinking that what Katz had just done could amount to interfering with the court process–a serious offence.
Their advocates accompanied Katz’s counsel, Gavin Woodland, to visit the judge in his chambers and raise the issue. They were granted a postponement. But on the way out, Woodland formally distanced himself from what Katz had done, declaring he had known nothing about it.
Shortly after that, Leonard Katz sent a letter denying everything, although he did not specify what he was denying. And he reserved his right to sue whoever.
Settlement
Things unravelled rapidly for the plaintiffs after that.
Within two days the two opposing law firms were talking settlement. On 12 November a signed settlement agreement was made an order of court by Judge Binns-Ward.
In effect, the original claim of R720 million was settled with a payment from the insurers of R27.5 million—less than 4% of the original claim. Investec had to pick up ENS’s fees and costs in the case.
References:
Noseweek: Dear Reader: Lennie dials the wrong number
fin24: Court deals blow to golf estate group
BusinessReport: Court finds former Pinnacle Point chairman owes Investec R240m
Image: Wikimedia Commons
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