BDO says Dame Jenny Shipley and two other directors have paid sums owed. Photo / Tania Whyte
BDO says Dame Jenny Shipley and two other directors have paid sums owed. Photo / Tania Whyte
Claims against failed national builder Mainzeal have risen to $159 million but liquidators settled matters with former Prime Minister Dame Jenny Shipley over $6.6m after last year’s Supreme Court ruling found she was liable to pay that.
Eleven years ago, BDO liquidators were appointed to King Facade butthe case has been running so long that the original liquidators have retired.
Now, Andrew McKay and Andrew Bethell of BDO Auckland are liquidators of 12 Mainzeal companies.
They have just released a new six-monthly update on progress.
The big court case result out last August ruled the Mainzeal directors were liable for $39.8m plus interest and costs but it also sparked more creditor claims.
Richard Yan, pictured in 2006. BDO wants to bankrupt him.
The six-monthly report said after publicity surrounding the Supreme Court judgment, several creditors who had not previously claimed had come forward.
“The updated creditor position confirms 1408 creditor claims totalling $159,022,990.01 have been received of which claims totalling $111,445,380.72 have been admitted with the balance being rejected or reduced.”
Three new claims totalling $363,000 were being assessed.
Shipley, Peter Gomm and Clive Tilby had settled payments of $6.6m each, the report said.
“The Supreme Court ordered the directors to contribute to the assets of the companies $39.8m together with interest at the prescribed rates for the period from 28 February 2013 to the date of the judgment. With interest, the judgment sum exceeds $60m,” McKay and Bethell’s report said.
Shipley was prime minister from 1997 to 1999.
Precisely how she and the other two directors settled their $6.6m payments was not stated.
But the new report refers to the liquidation process having “recovered insurance funds payable pursuant to the directors’ and officers’ insurance policy”.
Ex-Mainzeal chief executive Richard Yan had not settled the amount he was found liable for, McKay and Bethell wrote.
So BDO had started bankruptcy proceedings against him.
“The liquidators have settled with three of the defendant directors - Dame Shipley, Messrs Gomm and Tilby. The liquidators in conjunction with their legal advisers have commenced bankruptcy proceedings against the fourth director Mr Yan regarding recovery of the outstanding judgment sums,” McKay and Bethell’s report said.
BDO were appointed liquidators to Mainzeal subsidiary King Facade in February 2013 so the insolvency is a long-running matter.
Last August Shipley’s legal team, which also represented Tilby and Gomm, said their clients were “deeply disappointed” and “continue to regret the collapse of Mainzeal and its serious consequences”.
The 12 companies under BDO’s control are Mainzeal Property and Construction, Mainzeal Living, 200 Vic, Mainzeal Group, Building Futures Group Holdings, Building Futures Group, Mainzeal Residential, Mainzeal Construction, Mainzeal, Mainzeal Construction SI, MPC NZ and RGRE.
The Supreme Court dismissed the directors’ appeal and found they were aware of Mainzeal’s precarious position as the company struggled to make a profit after 2008.
It found the directors breached their duties under the Companies Act.
From January 31, 2011, the directors allowed Mainzeal to trade in a way which created a serious risk of substantial loss to creditors, which would have been apparent to them if they had acted with reasonable skill and diligence, the court ruled.
Mainzeal was incorporated in 1987 and from 1996 it was a subsidiary of companies associated with Yan, the Richina Pacific group.
From 2005, the firm was balance sheet insolvent.
The latest BDO report said $5.1m had been paid to creditors in the latest six months and $1.5m was held on trust for admitted or qualifying creditors who had yet to provide their bank account details.
“The liquidators have made considerable efforts to contact all admitted unsecured creditors and in November 2023, a first interim distribution of 6 cents in the dollar was paid to all those admitted unsecured creditors who have provided their bank account details,” the report said.
More money was due to be paid in late February.
Now, BDO planned to “pursue” recovery of the judgment sum awarded by the Supreme Court which Yan is yet to pay.
Another report is due out in six months.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
