Declaring bankruptcy hasn't stopped Geoffrey Edelsten from living a life of supreme luxury, with the disgraced businessman still blowing more than $48,000 a month on business class flights, five-star hotels and Gauthier jewellery for his girlfriends.
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Mr Edelsten, who claimed to have just $90 in cash when he filed for bankruptcy in January, has embarked on a spending spree that has left creditors fearing his estate is being drained ahead of any attempt to pay its debts.
The three-month splurge has included a $1500 visit to a Beverley Hills beauty spa, AFL corporate packages worth $7000 and hiring a global PR firm to try to rehabilitate his reputation.
"[Edelsten] is spending more money per month than many people make in a year," a lawyer for Mr Edelsten's creditors has claimed in US court documents.
"Edelsten has not been forced to change his own spending habits one bit, having seeming unfettered access to his creditors' funds."
The former doctor owes the Australian Taxation Office more than $8 million personally and through a series of businesses that have collapsed. Responsibility for tens of millions of dollars worth of assets and debt is in dispute with his former US business partners, the Mawardi family.
The spree comes as the 71-year-old is facing a contempt charge in a US court over claims he has also orchestrated a scheme to misappropriate millions of dollars in real estate from his bankrupt estate.
Last month, Mr Edelsten was grilled under oath about his relationship to a secretive Australian trust that owns a portfolio of luxury homes, high-end cars, and millions of dollars in shares and cash that he regularly accesses, but claims he does not own or control.
Despite a US court ordering him to "preserve" his assets, Mr Edelsten has transferred control of the trust to two long-time friends and business associates. Documents show they have since spent more than $3 million paying off the mortgages on Mr Edelsten's Melbourne penthouse without the court's approval.
"When the trust decides the money is yours, it's yours. When it decides the money is not, it's not yours. Is that the way it works?" asked Bob Stok, a lawyer for Edelsten's estranged US business partners.
"I think that that's true. It does depend on the circumstances," Mr Edelsten responded.
The US judge apparently disagreed, appointing an independent trustee to oversee Mr Edelsten's bankrupt estate the next day.
But Mr Stok has since filed a motion claiming Mr Edelsten's repeated "defiance" and "misconduct" amounts to contempt of court.
Mr Stok submitted as evidence statements for Mr Edelsten's American Express Card, which showed he spent $144,000 in just three months to May.
Among the charges were five business class flights to the US, stays at the Beverley Wilshire Hotel and Plaza Athenee in New York, $4000 for car parking and more than $9500 spent at Crown in a single day.
Mr Edelsten's reputation for spending has become legendary after the once-feted businessman blew $63 million in two years before declaring bankruptcy in early 2014.
Mr Edelsten told The Sunday Age the credit card statements were "months old" and mostly due to "business expenses". "The last contempt motion was found to be false. This contempt motion has no merit," he said.
cvedelago@theage.com.au
