A friend was chairman of an incorporated society which went into recess but had $10,000.00 in its bank account. On his

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Customer: A friend was chairman of an incorporated society which went into recess but had $10,000.00 in its bank account. On his lawyer's advice he withdrew the money and paid it into that lawyer's trust account. This was over 10 years ago and the lawyer has since retired. Now some of the former members have incorporated the club again (using exactly the same name) but the current partners are refusing to pay the money to the new club. They are saying that the old club should have been reinstated but when this was checked, they didn't qualify for reinstatement because the club had not been operating for the whole time that it was not registered. How does the new club get this money?
JA: What state are the friend and the partners in? It matters because laws vary by location.
Customer: New Zealand
JA: What steps has he taken so far?
Customer: Talking to the current senior partner, who ahs also written a letter to him, explaining that they will not release the money.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No
Answered by Chris The Lawyer in 14 mins 1 year ago
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Chris The Lawyer, Expert

Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today. Please give me a minute to read the question

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Chris The Lawyer, Expert

The new club is a new entity so is not entitled to the money as of right. The issue is who was the money held on trust for. The lawyer is correct in not wanting to pay this to the new club. I think however you should talk to Incorporated Societies and ask if in fact the old club can be reinstated, as it would be possible. Otherwise you need to look at the old club constitution and see what it says about where its assets should go if it was wound up. The problem otherwise is that you would need a direction from the High Court as to payment to the new club, which would eat up the funds. I am surprised the money is still held on trust because they may have needed to pay this to Inland Revenue as unclaimed funds, which may be an option, as then you could claim to Inland Revenue

Customer
Thanks. That's what I thought
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Chris The Lawyer, Expert

It isnt any easy solution I am afraid

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