Mainzeal's liquidators seek to double directors' liability to $73 million

Mainzeal's liquidators are seeking to double the amount the company's directors, including its chairman Jenny Shipley will have to pay creditors, from $36m to $73m

Property

Mainzeal's liquidators are seeking to double the amount the company's directors, including its chairman Jenny Shipley will have to pay creditors, from $36m to $73m

9th Apr 19, 12:32pm by Greg Ninness

Mainzeal Property & Construction's liquidators are seeking to double the amount several of the company's directors are liable to pay creditors.

Mainzeal collapsed in 2013 owning unsecured creditors around $110 million and in February the High Court found four of its directors, including chairman Jenny Shipley, had breached their obligations under the Companies Act and ordered them to pay $36 million to creditors between them.

Director Richard Yan was found liable for up to the full $36 million, while the liability of ex-Prime Minister Shipley and fellow directors Peter Gomm and Clive Tilby was capped at $6 million each.

All four directors have since appealed that decision, but Mainzeal's liquidators Andrew Bethell and Brian Mayo-Smith have now filed a cross appeal, seeking to more than double the total amount the directors are liable for to $73 million.

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6 Comments

by Mrs The Point | 9th Apr 19, 12:58pm 1554771506

D'oh, abandon Shipo. Thank heavens for family trusts.

by Foxglove. | 9th Apr 19, 1:15pm 1554772538

Not sure if this an appeal in its own right, or a cross appeal to that lodged by the directors. Appeals can swiftly become a double edged sword. Perhaps the directors have been obliged to take this action in order to satisfy their liability insurance requirements. Could therefore be a very painful costly exercise, if the damages are increased and the insurer finally declares that as trading whilst insolvent is a criminal offence, the insurance cover does not apply.

by Te Kooti | 9th Apr 19, 2:53pm 1554778431

I may be wrong, but my recollection from the directors course I did was that insurance covers the cost of defending yourself, but not the penalty. Appealing in this situation is a high stakes game. This must be a very sobering experience for her.

by Smalltown | 9th Apr 19, 2:22pm 1554776540

Any business/company that takes on an ex politican or ex All Black in a crucial role or advertising becomes an immediate short IMO.

by President of P… | 9th Apr 19, 3:26pm 1554780409

That rules out the banks...

by Nzdan | 9th Apr 19, 4:42pm 1554784933

2 thirds of the way there!