Lorraine Wood describes her late husband Bill as a “financial risk addict”.
She says: “Bill was a charming, charismatic man and an entrepreneur. He would buy businesses and turn them around. I had confidence in him and I left him to it. I didn’t realise how deeply he had gotten into debt.”
At the age of 62, Lorraine Wood had to extract herself from a $7 million debt, following the unexpected death of her life (and business) partner: not being afraid to seek advice and make tough choices helped her through it.
Wood became a shareholder in and part-owner of a portfolio of investments and enterprises, including a successful Sydney real-estate agency, after getting together with her late husband Bill in 1978.
In 1993, the pair established South Pacific Private (pictured below), an addiction and mental-health hospital on Sydney’s northern beaches which, since opening, has treated more than 7000 patients.
Picking up the pieces
Bill’s passing in 2000 saw Wood thrust in sole charge, not just of the hospital but a string of other investments of which she had scant knowledge.
“I knew some of the things he was doing, but I let them go. I didn’t say ‘no, this isn’t OK, we need to go and talk this out with the bank manager or solicitor’. I suppose I took the easy way out.”
“Then suddenly he was gone and I had to bring it all into line and make sense of it.”
‘It’ included a former factory in Wollongong which had been slated for conversion into a self-storage facility, the real-estate agency and several residential properties: investments whose associated debts totalled around $7 million.
Wood’s first step was to seek advice from some financially savvy folk in her inner circle.
“I had some wonderful friends who were very astute businessmen,” she says. “They helped me talk things through and ascertain my liabilities and options. After that we started disposing of what we could.”
“There were a few investment properties and we sold those first, one at a time, paying down the mortgages as we went.”
Squaring the books took around four years and called for some difficult decisions. Disposing of assets which had emotional significance was a particular wrench.
“One day the people who were handling my affairs said they wanted to talk to me and they came to the house and said, ‘Lorraine you need to sell your home’,” Wood says.
“I had a lovely place overlooking the harbour. They said ‘we need the money from your home – we might be able to get enough out [of the sale] to get you a unit’. I couldn’t cry because they were businessmen, but I was devastated.”
Blunts, the profitable North Shore real-estate agency she and Bill had owned for two decades, was also put up for sale in 2003.
Bill and Lorraine Wood first met in Auckland in 1991.
Back in the black
Liquidating the bulk of Bill’s businesses and investments made it possible for Wood to pay down the debt and retain ownership of South Pacific Private.
“Of course everybody said, ‘well, with Bill gone, of course you’ve got to sell the hospital now’ but somehow I just couldn’t bear the thought of it,” she says.
“Bill loved that hospital and I didn’t want to lose his legacy so I decided to keep it. My children were worried about me because they wanted me to retire and have an easy life but every time I thought of selling the hospital I felt sick, so I went with my gut feeling. I’m glad I did because it’s profitable today and I’m still more passionate about that business than anyone.”
Wood recently wrote a book about her experiences entitled Love and Addiction.
Her advice for others who find themselves drowning in debt?
“Negotiate smartly,” Wood says. “Sometimes women can be tough and they go for the last penny. Always leave something in it for the other fellow.”
“And get the best help you can. Don’t be frightened to pay for it even if you feel you can’t afford it. You need good advice and you need to be honest with people. Don’t try to cover up, tell them how you’re feeling and what’s happening. Above all, listen to your gut and have faith in yourself.”
'My financial journey' is a series from ANZ Women on how Australian women have overcome obstacles to take charge of their finances.