Liquidators target Blue Chip chiefs

Mark Bryers. Photo / Dean Purcell

Directors of various failed Blue Chip business could be chased for the financial collapse.

Jeff Meltzer, Lloyd Hayward and Arron Heath of Meltzer Mason Heath, liquidators of many Blue Chip companies, are examining the chances of pursuing directors for breaches of the law and reckless trading.

The latest six-monthly report on some Blue Chip companies delivered the glimmer of hope to about 2000 investors owed about $80 million.

"The liquidators have continued with their investigations into possible breaches by directors of reckless trading and other provisions of the Companies Act 1993 and potential claims arising from advice given to the Blue Chip Group in relation to its products.

"They are awaiting an opinion from Queen's Counsel on possible causes of action and the strength of any claims that may be made," Mr Hayward said in his report on one business, Bribanc Property Group, whose sole director is Neil Bell. Rikki Flowerday is a director of some of the other companies.

If the liquidators decide their chances are good, they said they would then need to hatch a funding proposal. This would need to be promoted to "potential funders" but the chances of success were uncertain.

"There is no certainty that the existence of such claims will be confirmed nor is there any certainty that the liquidators will be able to obtain funding on the strength of such claims," they said.

The liquidators have already had funding from the Ministry of Economic Development's liquidation surplus account which put up money to assist them.

But the liquidators also noted the lack of litigation success when the finance business was accused of breaching its duty of care to investors by lending them money which they then used to buy Blue Chip apartments.

The High Court found the finance company did not owe them a duty of care, the liquidators noted.

Co-founder Mark Bryers was made bankrupt in October owing an estimated $173 million to creditors, they said. Mr Hayward said the updates on the other companies all contained the same information.

An update had not been issued yet on Blue Chip New Zealand Ltd because it was not due now, he said.

The Bribanc report said the liquidators' view was that it was unlikely creditors would get money. "Any recovery actions that may be pursued by the liquidators will require funding which may or may not be available in the current economic climate," Mr Hayward wrote.

Bryers is scheduled to appear for sentencing on various charges in the Auckland District Court on May 20.