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22.04.2005 General News

Former bankrupt "Afra Airline Boss" acquires Bentley

By "The Australian"

October 02, 2003

A CONTROVERSIAL Brisbane businessman whose latest bankruptcy ended just two weeks ago has celebrated by acquiring a brand-new $500,000 Bentley Arnage.

Luke Norman Butler, the one-time head of fledgling airlines Global Air Australia and Oz Airlines, has been spotted in Brisbane proudly driving the new car.

But when approached he cited privacy and confidentiality for not revealing how the prestige car, fitted with NSW number plates, was financed.

Just three months ago, a Brisbane court ordered Mr Butler's firm to repay the Japanese Government $US6 million over a bungled contract he had entered to fly members of the Japanese Red Army from the Middle East to Tokyo. The terrorists were accused of massacring 26 people at Tel Aviv airport, Israel, in 1972.

Instead of explaining the financial dealings behind the Bentley, Mr Butler through his lawyer invited The Courier-Mail "for a brief test drive by one of your regular senior motoring writers".

"We are instructed to advise you that the contract to purchase the motor vehicle in question was entered into subsequent to the annulment of Mr Butler's bankruptcy," was his response through solicitor Chris Conley.

But the humour in the offer to test drive the prestigious Arnage – which can travel from 0 to 100km in 6.2 seconds – was lost on Melbourne-based Spirit Airlines, which claims it is yet to get a cent from Mr Butler despite its success in bankrupting him in February last year.

Spirit Airlines director Bill Collyer yesterday said his company, which took bankruptcy action after suing Mr Butler for $200,000 and incurring $60,000 court costs, was unaware that he had bought the prestige car.

Mr Collyer said Spirit Airlines had been "out-manoeuvred" by so-called "friendly creditors" who last month had voted to annul Mr Butler's bankruptcy.

A bankruptcy can be angled when agreed to by 50 per cent of creditors representing 75 per cent of debts.

Melbourne-based trustee Paul Pattison annulled the bankruptcy on September 17 and it is claimed Mr Butler flew to Sydney within days to take delivery of the Bentley.

Bentley's Sydney dealership – while refusing to confirm it dealt with Mr Butler – yesterday said designer Bentleys generally were ordered six months in advance, and were hand-made to customer specifications in Crewe, England.

In his statement of affairs, Mr Butler declared he owed $2.851 million in debts and guarantees to unsecured creditors. Esanda Finance was owed $20,000 and it is understood the Commonwealth Bank some $960,000.

Mr Conley said some $325,000 was paid to Mr Pattison for distribution. Mr Collyer last night expressed concern that some of Mr Butler's debts may have been overestimated, a situation which would have helped the annulment to occur.

But the idea was flatly rejected by both Mr Conley and Mr Pattison, who said he had demanded all creditors prove what they were owed.

Strangely, it appears Spirit Airlines itself voted for the annulment, a situation Mr Collyer can only explain by saying Spirit had agreed to it knowing it was a fait accompli.

It was revealed yesterday that Mr Butler rented a property in Killara Ave, Hamilton, for about two years, moving out in January last year.

Mr Cavallaro said Mr Butler paid the rent up-front for the first year with a cash payment of about $30,000.

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