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Multi-million Dollar Settlement from Claim

Multi-million Dollar Settlement from Claim Against Directors

John Vague and Graeme McDonald (McDonald Vague), Liquidators of DML Resources Limited (In Liquidation), have reached a multi-million dollar settlement in a claim they brought against Murray Bolton, Stuart Walbridge, Laurie Margrain and Wayne McCarthy - directors of the company. McDonald Vague were assisted in this action by Kerry Fulton, Barrister.

The exact amount of settlement is not available from McDonald Vague.

The Liquidators brought the claim starting December 2001 for breaches of directors' duties under the Companies Act, and the case was set down in the High Court at Auckland on 9 February 2004 for a five week trial. Settlement occurred last week and the settlement sum was paid across to the Liquidators on 30 January. Together with money from other settlements, it will enable the Liquidators to soon pay out around 60 cents in the dollar to the 400 or so creditors of the company. Creditors have received 5 cents in the dollar previously.

DML Resources Limited (In Liquidation) was at one time the largest single asset in the failed Skellerup Group and was a mining company.

"We are delighted at this outcome, and it justifies our pursuit of this lengthy and complex claim," says John Vague, partner in McDonald Vague.

"It is very satisfying to deliver a good result to patient creditors, who supported us in our actions," says partner Graeme McDonald.

Mr Vague said that the directors of DML Resources Limited (In Liquidation) were insured and they consistently denied liability.

The timeline of the claim was:

• 1 November 1997, DML Resources Limited (In Liquidation) placed into receivership.

• 7 May 1998, company placed into liquidation with McDonald Vague as Liquidators as the result of an approach from larger creditors. Four months later, joint liquidators John Vague and Graeme McDonald negotiated a settlement with debentureholders whereby they agreed to waive any further claims, and cash and assets were transferred to the Liquidators.

• December 2001, claim commenced.

• November 2003, some issues partially settled. DML Resources Limited (In Liquidation) narrowed its claim to reckless trading.

McDonald Vague has also succeeded in reducing total creditors' claims by a substantial amount and has succeeded in other claims for the benefit of creditors, including a large recovery following the arbitration of a DML gold mining contract.

"We believe the success was because of the team work of liquidators and their staff, the liquidation committee and legal counsel, Kerry Fulton", says Graeme McDonald.

McDonald Vague was established in 1989 as New Zealand's first specialised insolvency practice. It remains one of the largest national practices focused solely on insolvency and business recovery in New Zealand.

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