Liquidation looms for Tasman Pacific

By DANIEL RIORDAN aviation writer

Creditors of Tasman Pacific (alias Qantas NZ) are gunning for the failed airline's directors and shareholders.

Base Care, which provided valet parking services to Qantas NZ, has made a formal statutory demand on Tasman Pacific for repayment of its debt of close to $120,000.

If it does not get the money within 15 working days - which seems almost certain - it can seek to liquidate the company. Other creditors are expected to join the action.

Tasman Pacific went into receivership on April 21 owing creditors more than $50 million.

Insolvency experts Montgomerie & Associates are acting for Base Care.

Principal Bernie Montgomerie said the receiver acted only for the debenture holder, the Bank of New Zealand, and liquidation could allow other creditors to take wider aim and hold directors and shareholders accountable for their losses.

Tasman Pacific receiver Michael Stiassny would not comment yesterday on the liquidation move, but hoped to release a statement on his progress with the receivership early next week.

Tasman Pacific directors who bailed out as the airline slipped towards receivership could still be personally liable to its creditors.

The resignations would not release the directors from any personal liabilities they might have to creditors - if it could be shown that they remained on the board past the point where they should have known the company was trading while insolvent.

Under Section 131 of the Companies Act, directors have a responsibility to act in the best interests of their company.

But once a company reaches a point where liabilities exceed assets, the creditors have a bigger stake in the company than shareholders.

The courts have tended to interpret directors' responsibilities from that point to be to the creditors, rather than to shareholders.

Under Section 135, which covers reckless trading, directors must not allow a firm to trade in a manner which is likely to create a "substantial risk of serious loss" to creditors.

Another of Tasman Pacific's biggest creditors wants to find out whether the failed airline, which flew as Qantas NZ, continued trading while insolvent.

Pacific Flight Catering director Terry Hay said his firm, which laid off 70 of its 225 staff after being left more than $1 million out of pocket by the collapse, would probably join the action being mounted by Base Care to wind up Tasman Pacific.

"I think anybody that got past second grade mathematics has figured out they didn't lose all this money in the last week or the last month, or the last two months or the last three months."

He said he could not help wondering whether the reason the statutory accounts were not filed on time was that they might have shown the airline was trading insolvent.

"They thought they were going to sell it at a nice profit, maybe to Qantas, and they sacrificed a lot of people who they didn't ask if it was all right to use their money on the opportunity they had to enrich themselves. And that's not right."

Mr Hay said he had yet to commit to the liquidation action, but would probably join, as any creditor who stood outside the action would miss out on any money directors and shareholders might be told to pay.

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