Montie Baskett

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Montie is engaged on a project basis
Contact Joel Murphy in the first instance

Montie is a consultant for Holland Beckett engaged on a project specific basis.

Montie has over 20 years of experience in construction contracts, energy, infrastructure and property development projects, investment structuring, joint ventures and outsourcing, capital raising and corporate governance.

Prior to joining Holland Beckett, Montie held senior in-house legal and risk management roles in the electricity, construction and property development industries. Earlier in his career Montie held senior positions in Buddle Findlay and Russell McVeagh in Auckland.

Montie is passionate about the Bay of Plenty and its local business having recently returned to live in the region after beginning his career in Auckland. He has a practical, outcome focussed approach to dealing with legal issues for his clients.

Outside of work Montie enjoys spending time with his young family, water sports of all types, working on his family’s forest block, cycling and music.

Montie Baskett's Expertise

Renewable Energy & Climate Change

Rural & Agribusiness

Corporate & Finance

Property Law

Commercial Law

Montie Baskett's News & Resources

With Strings Attached – Exit Strategies for Small Business Owners

It is not an easy time to be selling a small business. High inflation and waning consumer demand has lead to compressed margins and reduced revenue for many. Uncertainty in the global markets due to wars, protectionism and the changing geopolitical landscape has blunted the confidence of prospective purchasers. Closer to home, sub 3% interest rates are now a fading memory and house prices have come off their peak, so fewer aspiring business owners can easily ‘top up their mortgage’ to fund the purchase of a business. How can sellers respond? Business owners looking to sell and wanting to achieve the best price for their business may need to consider options to reduce a purchaser’s reliance on third party finance to fund the acquisition of their business. This may include: Asset restructuring: Premises, plant and equipment are restructured to reduce the capital investment required by a purchaser. For example, valuable machinery could be retained by the seller and leased to the purchaser, meaning that the purchaser does not have to finance the upfront cost of purchasing that asset. Vendor finance: The seller advances a portion of the purchase price to the purchaser to be repaid by the purchaser over time. Vendor loans vary widely in terms of whether they bear interest, whether they are amortising (repaid gradually over the term) or repaid in a lump sum on a fixed date. Earn Outs: The purchaser agrees to pay part of the purchase price in instalments contingent on the business achieving certain financial targets. Payments could be fixed or adjusted based on the level of revenue generated by the business. Vendor Shares: The vendor retains shares in the business. The vendor might give the purchaser options to acquire 100% of the shares over time. Objectives and Risks From a seller’s perspective, the most common objective of using any of the above mechanisms is to achieve a better price for their business. Compared to fully bank or finance company debt funded transactions, vendor funded transactions generally expose the seller to risk of purchaser default over a longer period. This is because repayment of vendor loans or achievement of earn-out targets depend on the success of the business under new ownership. These risks can be reduced by, for example: Requiring the purchaser to pledge security to the seller (mortgages, personal guarantees, registered security interests). Giving the seller a right to appoint a director for so long as they continue to hold shares in the business. Contractual provisions that exclude artificial reduction of gross profits for the purposes of earn out calculations. Complexity and Cost If not managed well, transactions that include vendor funding mechanisms can be more complicated and take longer to negotiate than similar deals that are not vendor funded (and increased legal costs as a result). Also, the downstream consequences of vendor funding arrangements need to be carefully thought through to avoid unforeseen negative consequences. For example, if the vendor registers a security interest in the business assets, how will that affect the purchaser’s ability to raise finance or obtain trade credit moving forward? In our experience, the best outcomes typically start with a well-designed structure. Convoluted and legally complicated structures are generally less effective in practice than more straight forward, logical structures. Complexity can often be avoided if the transaction is properly designed from the outset. Business owners considering vendor funding options should: Discuss potential structures with their business broker or lawyer to identify fit-for-purpose options that could be offered to potential purchasers; Focus on the characteristics of the business and the specific circumstances and objectives of the seller and buyer when designing a transaction structure - do not start with a particular structure in mind and adapt it to fit the circumstances (this is a recipe for legal complexity); and Try to aim for a structure that makes commercial sense and avoids risks being transferred to a party who cannot control it or who would not naturally be exposed to it. A well designed vendor funding structure should be easy for all parties to understand and give the purchaser sufficient freedom and control to ensure the business remains successful while minimising the default risk faced by the seller. Our commercial team at Holland Beckett is experienced in business sale transactions from $50,000 to $100 million including vendor funding arrangements of all types and would be happy to discuss how to make the sale of your business a success for you and your purchaser.

Understanding your obligations under the Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides a consumer with remedies if a business has failed to provide them with goods or services to a reasonable standard, regardless of whether the consumer has a written warranty or guarantee from the supplier or manufacturer. The CGA is intended to foster a trading environment in which consumer’s interests are protected, businesses compete effectively, and consumers and businesses can participate confidently. Does the CGA affect me? If you supply products or services as a normal part of your business, you are likely to be considered \'in trade\' and the CGA will apply to your business transactions. The CGA will affect you if you are a manufacturer of products that are subsequently supplied to consumers, even if those products are indirectly supplied through distributors and/or retailers. Parties to business-to-business transactions can (and regularly do) agree to exclude or modify some or all of the default guarantees and remedies under the CGA, but such an agreement must be in writing and the parties will only be bound if it is fair and reasonable. A manufacturer of a product could exclude the CGA in a contract with a distributor, but that will not affect the rights of an end consumer of that product under the CGA against the manufacturer. What are my obligations under the CGA? As a business or person in trade, any goods or services you manufacture or supply must meet the minimum requirements outlined in the CGA. Goods must: Be sold with clear title free from security interests Be of acceptable quality Be fit for purpose Match their description Comply with samples Be reasonably priced, if there is no predetermined price If delivered by the supplier, be delivered on time Have spare parts or repairs available Services must be: Performed with reasonable skill and care Fit for purpose Provided within a reasonable time Priced reasonably, if there is no predetermined price For more detail on these obligations, see the guidance available on the Consumer Protection website. When might I be liable to claims under the CGA? If a supplier has breached a guarantee under the CGA, the consumer may have remedies including requiring the supplier to repair, replace or refund the purchase price. The consumers remedy will depend upon the severity of the breach and the type of product or service concerned. For smaller claims, if a consumer is unable to resolve the matter directly with a supplier, a cost effective approach may be to make a Disputes Tribunal claim. If you are would like to understand more about your rights or responsibilities under the Consumer Guarantees Act, Holland Beckett can provide you with advice and guidance.

Construction Contracts (Retention Money) Amendment Act 2023 – ‘The Highlights’

The collapse of high-profile construction businesses such as Mainzeal and Ebert Construction and subsequent judgments dealing with the distribution/management of retentions have prompted some important legislative changes affecting the construction industry. The most recent change being amendments to the Construction Contracts Act 2002 (CCA) contained in the Construction Contracts (Retention Money) Amendment Act 2023 (“the Amendment Act”). Scope The Amendment Act affects retention money (commonly referred to as retentions) withheld under a commercial construction contract entered into or renewed after 5 October 2023. Purpose The main purpose of the Amendment Act is to provide contractors with more transparency and control over retentions held against them, and to ensure that those retentions are not intermingled with other funds of their customers, which had previously made recovery difficult if the customer became insolvent. Retention Money Scheme Retention money is money owed to a contractor that is held back by the customer to secure the performance of the contractor’s obligations under a construction contract. It is common for a customer to be entitled to hold back a percentage of each of the Contractor’s progress payment claims which accumulates as retentions. In 2017, an earlier amendment to the CCA introduced mandatory rules contained in a then-new Part 2A of the CCA that determined how retentions are required to be held, accounted for and used by the party retaining them. However, deficiencies in these rules were highlighted in the context of liquidation proceedings and related cases following from the collapse of Ebert Construction in 2018. In particular, although the intention that retention money would be held “on trust” and that accounting records must be kept by the party holding those retentions was clear, it was less clear that retention money had to be held in a segregated account or what the consequences were if retention money was not held and accounted for with in the correct manner. New Requirements The Amendment Act clarifies and supplements the previous provisions in the CCA regarding retention money. In particular: the party who is entitled to withhold retentions is deemed to hold that money on trust from the point in time that it becomes entitled to withhold them (ie. the portion of a payment claim that is able to be held as a retention must be held on trust whether or not the balance of a payment claim is actually paid to the contractor); retention money must be segregated from other funds, for example in a trust account or escrow arrangement with a third party. This is to avoid retentions being intermingled with other funds of the customer; and accounting records, including a ledger for each retentions account, must be kept by the party holding retention money; contractors are entitled to certain information about their retention account including in what type of account, and with whom, the retentions are kept and ledger records; continuity of the trust applying to retention money in the event of a liquidation or receivership of the customer is expressly provided for; MBIE is given powers to enquire into and enforce compliance with the retentions rules directly; and new penalties for non-compliance are introduced including fines of up to $50,000 for a director and up to $200,000 for a company. Next Steps Our construction law experts at Holland Beckett can assist people who intend to withhold retention money under a construction contract to ensure they comply with the above requirements and to advise contractors on their rights and remedies in relation to retentions held against them.

I want to build in my backyard, now what?

Historically, it was very common for properties to have had some sort of “DIY” building works, whether it be a garden shed, out-house, tree house or internal renovations. These days, it feels like there is so much “red-tape” and cost that comes with doing building work on your land that is very hard to justify doing it (or doing it properly). So, if you want to build your own shed or addition, this is what you should know: It’s my land, can’t I just do what I want? Unfortunately, no. There are rules in place regarding how you can and cannot use your land. This is set out in the relevant ‘District Plan’ prepared by your local council. You may need to obtain a building or land use consent from the council. These consents give you permission to build a structure or use your land and its natural resources in a way that is not allowed as of right in the District Plan. Do I need a building or resource consent? This depends on what you want to do. Generally building consents will be required for any structural building work, new plumbing and drainage works, retaining walls or fences over a certain height or swimming pools. Land use consents, or resource consents, will normally be required for activities such as property development (including building additions or alterations), earthworks, or changes to use of natural resources (ie. water). If you have engaged a builder or other professional, they will be able to tell you if you need a consent. You can also talk to your local council or look on the council’s website. If I do need a consent, what do I need to do? You will need to make an application to your local council. The council will decide whether to grant the consent or not, and may impose conditions on you. It can be a long and drawn out process. If you have a builder, they will generally apply for any building consent on your behalf. If you need a resource consent and need assistance, our experienced team members can guide you through the process. What if I need a consent and I don’t want to get one? If you decide to undertake the work without the proper consent, you will need to be aware that you could later be required by the council to remove or modify the works undertaken. You should also be cautious if you later sell the property, so that the purchaser is not mistaken about it lawfulness of the addition/work. Do I need to tell my insurance company? You should talk to your insurance company before you undertake any major works, whether consent is required or not. Depending on your policy, your insurer may require you to obtain a short term construction policy, such as covering loss and damage to materials on site. They may also require documentation on completion, for example, certification from a qualified electrician that works were done to the proper standard. Holland Beckett Law can help you to determine if your planned works need consent, or with the consenting process.