Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Mainzeal Directors Found Negligent And Owe $36m

MAINZEAL DIRECTORS FOUND NEGLIGENT AND OWE $36M

The decision released today by the High Court found that the former Mainzeal directors, including Rt Hon Jenny Shipley and Richard Yan, breached their directors’ duties and were negligent in allowing the company to continue trading while insolvent, awarding damages of $36m.

Liquidators of the failed Mainzeal group of construction and building companies, Brian Mayo-Smith and Andrew Bethell of BDO, said the creditors have waited a long time for this day.

“We are thrilled with this judgment by the High Court which sets an important precedent for the required standards of corporate governance and care owed by company directors in New Zealand towards the company and creditors,” Mr Bethell said.

“When the company collapsed in 2013, unpaid subcontractors and creditors were owed more than $115m. Many of these creditors themselves were put into serious financial difficulty as a result of the decisions made by the former directors.

“It has been a long, hard road to get to this point and, as a result of the court case and the damages awarded of $36m, creditors of the failed company will now receive some compensation for the losses they suffered.”

“Directors have a responsibility to take into account the interests of creditors, existing and future, and not to allow a company to trade recklessly or incur obligations it cannot reasonably expect to be able to perform. This court case sought to hold the former directors liable for their actions in allowing Mainzeal to trade while insolvent and today’s decision has recognised that negligence,” said Mr Bethell.

In addition, a further $2.1m was awarded to the liquidator in relation to other claims made by the liquidator.

ENDS


Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.