The company directors behind the Kazaa peer-to-peer software have sold and mortgaged their multi-million dollar homes as the end of court proceedings looms.
The Federal Court heard on Friday that Nikki Hemming, CEO of Kazaa owner Sharman Networks, sold her property in the exclusive Sydney suburb of Castle Cove in February for $2.1 million.
"[They] are at the point where they seek to dissipate their assets in anticipation of an adversarial finding," counsel for the record labels, Tony Bannon SC, said.
The property was sold to John Myers, an accountant for financial advice firm Terra Crest Business Solutions (TCBS). However, the listed address of TCBS was the same as LEF Interactive, the parent company of Sharman Networks, Bannon said.
Myers was described as "Sharman's accountant" in e-mails produced as evidence in the trial.
Bannon questioned the nature of the sale, and said Hemming was still living at the home.
Bannon revealed that a similar property transfer by Kevin Bermeister, managing director of Brilliant Digital Entertainment and subsidiary Altnet, was made in September. Bermeister, who lives with his wife at their home in Vaucluse, Sydney, mortgaged his share of the property to his spouse for $3,375,000.
Bannon also noted that Brilliant Digital Entertainment's lease on its Australian premises in Sydney expired last month.
"These events... demonstrate the risk of disposition of assets," Bannon said.
The record industry filed a motion seeking "Mareva orders", which prevent the Sharman parties from further transfer of assets.
"Identifiable assets have been disposed out of the control of the respondents," Bannon said.
"We want an indication of what other assets there may be."
However, senior counsel for Sharman, Anthony Meagher, said the matter should be adjourned till the trial resumes on March 22.
Sharman was were in the midst of preparing final submissions, and the motion was just a distraction tactic, he said.
"The applicants became aware of this on February 17, and wrote to us on the 28th," Meagher said.
"That indicates the [level of] threat they anticipate that assets will be moved."
Sharman was prepared to agree to the Mareva orders, but not the disclose of other assets, which weren't relevant to the central issue of copyright, according to Meagher.
Justice Stone adjourned the matter to Friday afternoon.