Mainzeal Cross-Appeal Claims Compensation of $73m

Published: Tue 9 Apr 2019 01:55 PM
Media release, 9 April 2019
Mainzeal Cross-Appeal Claims Compensation of $73m
Following the appeals lodged by the former directors of Mainzeal, the liquidators of the failed construction group have filed cross-appeals on behalf of the companies and their unpaid subcontractors and creditors.
Liquidator Andrew Bethell, BDO, said the cross-appeals against the directors will challenge the $36m order for contribution awarded by the High Court. The cross-appeals also challenge the apportionment of liability by the High Court between the directors based on different degrees of culpability.
“The High Court found that the former directors exposed the creditors to illegitimate risk by using creditors’ money to continue trading while insolvent for a number of years. The Liquidators welcome that decision on liability. The directors’ breach of duty caused a total loss of $110m to the creditors. However, the High Court applied a discount of two-thirds to the starting point for contribution. The Liquidators considered that the starting point for contribution should be not less than $73m or two-thirds of the $110m total losses suffered by creditors.
Mr Bethell adds “Richard Yan and Dame Jenny Shipley both held powerful positions in the Group, were more culpable than the other directors, and their contribution to the losses suffered by the company should be higher.
“Mr Yan’s culpability is well addressed in the High Court judgment. Ms Shipley was a director and chairperson of Mainzeal for 9 years, from 1 April 2004 until 31 December 2012. The company collapsed in February 2013. Between April 2004 and October 20009, she was also a director and shareholder in Richina Pacific, Mainzeal’s Bermuda based owner, a company that used Mainzeal money together with other funds to acquire substantial assets in China that are now extremely valuable.
“The High Court judgement was clear on the factual basis supporting the finding that the former directors breached their duties in allowing the company to continue trading while insolvent. We remain fully committed to ensuring these directors are held accountable and that creditors are compensated for their losses,” said Mr Bethell.
The appeals and cross-appeal are expected to be heard in the Court of Appeal early next year.

Next in Business, Science, and Tech

PGF backing growth in Gore
By: New Zealand Government
Cigarette price rise offsets cheaper petrol
By: Statistics New Zealand
MBIE reinstates Fuji Xerox as a government supplier
By: BusinessDesk
Service sector growth at lowest level since 2012
By: BusinessDesk
Auditor-General ramps up scrutiny of the PGF
By: BusinessDesk
Management, monitoring, and evaluation of the PGF
By: Office of the Auditor-General
PGF invests in Top of the South ocean economy
By: New Zealand Government
Supporting our regions with $2.3 million investment
By: New Zealand Government
Cawthron welcomes funding for National Algae Centre
By: Cawthron Institute
Council welcomes funding for Smart Services
By: Marlborough District Council
Innovative Intergenerational Regional Strategy Announced
By: Marlborough District Council
NZ 1st-qtr inflation comes in below expectations
By: BusinessDesk
MBIE lifts suspension on Fuji Xerox
By: Fuji Xerox
Economy slowing while Government in denial
By: New Zealand National Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media