UPPER Hunter MP Michael Johnsen said he had reached an agreement with the family of a former business partner threatening bankruptcy proceedings that could have stopped him from standing for his seat at the March state election.
“All I can say without breaking a confidentiality clause is that a figure has been agreed by all the parties and everything is in place to finalise the matter in days,” Mr Johnsen said in a statement to the Newcastle Herald after a Fairfax Media article today revealed the legal threat behind a delayed Nationals preselection vote for his seat.
Mr Johnsen is alleged to owe $302,000 to the family of his former business partner Chris Walker, who died in January 2011. His children have pursued Mr Johnsen for a 40 per cent share of the mortgage broking practice the two men owned.
The family is reported to have threatened in April to take the matter to the Federal Court and seek orders for bankruptcy which would have forced Mr Johnsen from Parliament. Anyone who is bankrupt cannot sit in Parliament.
The District Court in Tamworth is reported to have issued an order in March for Mr Johnsen to pay the Walker family an amount of money. A legal firm for the Walker family is also reported to have written to the NSW Nationals in May requesting the intervention of NSW Premier Gladys Berejiklian.
In October the Herald reported on rising concerns about the delayed Upper Hunter Nationals preselection vote, after Upper Hunter conference chair David Layzell confirmed the party’s vetting committee was “just having issues” and needed more time to finish the vetting process.
Mr Layzell also told the Herald he could nominate for preselection for the Upper Hunter “if the door opens”.
Mr Johnsen was already facing an extraordinary challenge to a sitting member by Upper Hunter councillor James Burns, after the safe Nationals seat was reduced to marginal when Mr Johnsen was elected in 2015. Country Labor and the Shooters Fishers and Farmers party have both fielded strong candidates to take the seat in March, which is held by the Nationals with a 2.2 per cent margin.
In an email on October 17 in response to Herald questions about whether there were problems with the Upper Hunter Nationals preselection, party state director Ross Cadell hosed down suggestions of problems about vetting of either Mr Johnsen and Mr Burns.
“Someone has given you false information,” Mr Cadell wrote.
But this morning, in response to the Fairfax Media article, Mr Cadell confirmed the delay related to Mr Johnsen and the bankruptcy threat.
“NSW Nationals have been kept informed of the progress of the negotiations and are pleased that the matters are settled,” Mr Cadell said.
“Mr Johnsen has been meticulous in supplying us with documents that confirm his efforts to, and success in finalising the matter.”
He said the preselection “is still proceeding as planned as the information released today is old and has no bearing to the current state of the matter”.
“Michael Johnsen remains a candidate for the preselection,” Mr Cadell said.
In a statement to the Herald this morning Mr Johnsen said he was disappointed the matter was not resolved earlier.
“My business partner was my friend and just like his family, I was devastated when he passed away,” Mr Johnsen said.
“Unfortunately the sale of businesses can be complicated, and many matters led to a reduction in the final realisation price that made the final settlement number reduce significantly. I thank the Walkers for their understanding.”
In his statement Mr Johnsen raised a question about the source of the public airing of the damaging bankruptcy threat, by noting that “The Walkers... were about to close a chapter in their lives, only to have the wound opened for the benefit of others”.