He is supposed to be one of the country's richest men, but in a court battle with fellow directors and shareholders Bill Birnie has revealed he could be sunk by a $19 million lawsuit.
Yesterday, Mr Birnie told the Herald: "I'm not broke". However, affidavits filed by his defence team in the High Court in Auckland indicate he would not financially survive losing a lawsuit over a luxury golf course development.
Allen Peters and Bernard Quinn, directors of one of Mr Birnie's companies, Birnie Capital Property Partnership (BCPP), want him and business partner Stephen Norrie to repay $19 million.
Court documents filed by Mr Norrie and Mr Birnie as part of their defence say Mr Birnie does not have the money.
Mr Birnie has heavily invested in BCPP. As a condition of BNZ's $6.5 million loan to the company to buy parts of Kawau Island, he had to provide a personal guarantee of $2.5 million. He also has other interests and companies linked to BCPP.
The company spent $19 million gaining resource consent for the proposed Lion Rock Golf Course on the Purerua Peninsula. This is the amount Mr Peters and Mr Quinn are seeking.
They allege Mr Birnie and Mr Norrie breached their fiduciary duty as directors of BCPP.
Mr Peters' lawyer said the plaintiffs no longer saw the golf course as a viable option for BCPP as it would cost an estimated $135 million to complete.
Due to Mr Peters' action, BNZ issued a statement on Thursday that none of its money was to be used by BCPP for litigation. Mr Birnie's lawyer, Michael Reed, QC, told the court BCPP could not fund its legal fees.
The allegations were heard in the High Court. Justice Raynor Asher has reserved a decision on whether the case should proceed.
Bill Birnie:
* Venture capitalist and former deal maker for Fay Richwhite.
* Worth $100 million in 2009, according to the National Business Review's Rich List - he says the true figure is many millions less.
* Board director for more than 45 companies.
* Director of the Screen Council of New Zealand and a commissioner and deputy chairman of the New Zealand Film Commission.
CORRECTION
An article in the Business Herald yesterday stated that Bill Birnie and Stephen Norrie are being sued for breaching their fiduciary duties by taking risks with Birnie Capital Property Partnership and its development of a golf course in the Bay of Islands. The Business Herald accepts this is not the case. The article also stated they are facing a claim for $19 million that had been lost due to mismanagement. The Business Herald accepts this is also inaccurate. The claim for $19 million relates specifically to a dispute over voting on a put option over the golf course assets held by BCPP.
