Richard Yan appealing High Court decision which found he breached his duties as a director of Mainzeal by allowing the company to engage in reckless trading prior to its collapse

Richard Yan appealing High Court decision which found he breached his duties as a director of Mainzeal by allowing the company to engage in reckless trading prior to its collapse

Mainzeal Property and Construction Ltd director Richard Yan is appealing a High Court decision that found he breached the Companies Act and found him liable to pay up to $36 million to the collapsed company's creditors.

Mainzeal collapsed in 2013 owing creditors about $110 million, and in a case brought by the company's liquidators, Justice Francis Cooke found that Yan and three of his fellow directors were liable for breaches of their duties under section 135 of the Companies Act, which relates to reckless trading.

The court found that the directors should pay $36 million to the company's creditors, with Yan potentially liable for the full amount and fellow directors Clive Tilby, Peter Gomm and former Prime Minister Jenny Shipley, jointly liable with Yan for up to $6 million each.

Yan has appealed that decision, claiming there was breach of natural justice in the High Court's decision and that it also erred when it found he breached the reckless trading provisions of the Act and also in its calculations of the amount of he should be liable to pay creditors.

It is not known if Shipley, Gomm and Tilby also intend to appeal.

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3 Comments

I fully agree with Richard, it’s grossly unfair the amount he’s liable to pay creditors. Let’s make it $110 million.

I'm with you

Perhaps the Government should consider a law that prevents any loan to Chinese entities without some kind of surety from the Chinese Government that they will be repaid? Surely the Chinese entity to whom the loans were made is still on the hook for those loans? Perhaps JA could bring it up with Xi?