A PROPERTY firm owned by a crooked New Town lawyer has sparked an investigation by an insolvency watchdog after staying in liquidation for seven years.
Michael Karus, 51, who was jailed for three-and-a-half years for embezzling £400,000 from a pensioner’s estate, was the owner of Millbraid Ltd.
Now the Insolvency Practitioners Association (IPA) is understood to be probing its liquidation, which has dragged on since 2006.
Creditors are believed to be unhappy with the protracted nature of the winding up of the firm, which was formed in 1997 as a property development and buy-to-let business in Edinburgh.
One former business associate of Karus said: “Seven years is a ridiculously long time for a liquidation. During most of that time, Karus was banned from being a company director so he shouldn’t have had anything to do with the process.
“There were 20 properties in the company but only three are left now. It’s impossible for a liquidation to take that length of time. You have to wonder what’s being going on.”
The liquidation is being carried out by Glasgow-based insolvency practitioner Kenneth Pattullo, a partner at accountancy firm Begbies Traynor. It is understood that Mr Pattullo’s actions over Millbraid are the subject of the IPA investigation following a complaint.
The IPA authorises the licensing of insolvency practitioners, and can reprimand them if improper behaviour is uncovered.
The Evening News made repeated attempts to contact Mr Pattullo over the Millbraid case but he failed to respond.
In December, Mr Pattullo and law firm Brodies LLP were criticised by judge Lord Hodge over “irregularities” in the liquidation and the “improper bypassing” of procedures in their handling of the winding up of a company.
The judge attacked the “unacceptable events” which occurred in the winding up of Quantum Distribution (UK) Ltd and sent copies of his comments to the IPA.
A spokesman for the IPA said they were unable to comment on whether they were looking at Millbraid.
Karus was banned from being a company director in 2004 after one of his firms Arrowbay went bust with debts of £274,000. After that ban lapsed, Karus relaunched his business career with new firm Playfair Investments in 2011.
He was known to boast of being a “shark” who preyed on vulnerable victims and even named two of his firms GWS (Great White Shark) and Mako – after the shark – in celebration of his predatory style.
Karus could not be reached for comment.
A ruthless brother and son
MICHAEL Karus hit the headlines in 2011 after suing his sister and brother-in-law, as well as his sick mother, in separate legal actions.
Karus took his sister, Anielka McElvogue, and her husband, Anthony McElvogue, both 53, to court in a bid to recover assets he transferred into their names to protect his property empire.
Karus admitted carrying out the transfer to hide his real worth from his estranged wife, to stop her launching a divorce claim for part of his fortune.
In November 2011, it was revealed that Karus was suing his elderly mother Mary Karus, who suffered from dementia and has since passed away, for £350,000.
He said his mother owed him the cash from the £725,000 sale of a home in Craigleith View after its repossession.