By Victoria Young
Aug. 16 (BusinessDesk) - Former Mainzeal director Richard Yan says he’ll fight pressure from liquidators at BDO after they moved to make him bankrupt.
On Monday, BDO liquidators Andrew Bethell and Brian Mayo-Smith said they had been forced to apply for bankruptcy to get Yan to pay some $18 million awarded to them by the High Court at Auckland.
Yan is appealing the $36 million awarded against him and three other former Mainzeal directors by Justice Francis Cooke in February this year. The insurers for Jenny Shipley, Clive Tilby and Peter Gomm, who were also held liable, have already provided security for their half of the $36 million.
On Aug. 8, associate judge Hannah Sargisson gave permission for BDO to serve a bankruptcy notice outside New Zealand.
The associate judge set a deadline of 25 days to comply with the demand or file an application to set aside the notice. Her minute says Yan’s lawyers have already indicated they will do the latter.
The High Court at Auckland said it was appropriate to chase Yan outside New Zealand because the debt owed to the liquidators had a “real and substantial connection with New Zealand”.
In her minute, the judge noted that Yan’s lawyers were protesting jurisdiction on his behalf.
In a statement through his lawyers, Yan said in any event he has offered undertakings to address concerns that he might not be able to pay - but did not elaborate on what those undertakings were.
“Mr Yan intends to resist the use of bankruptcy procedures to place pressure on him while his appeal is pending,” the statement from Tim Mullins, a partner at LeeSalmonLong, said.
“As everyone is aware, the judgment is subject to appeal. Mr Yan has pursued his appeal diligently. Mr Yan does not accept the plaintiffs will suffer any prejudice from awaiting the outcome of the appeal.”
Mullins said that he could not provide further comment at this stage.
Property records indicate that in Auckland Yan part-owns Remuera property with a ratings value of more than $10 million and an Epsom home valued at $4 million. He is also the sole shareholder of a company which owns Campbell Park, a 32-hectare estate near Oamaru.
The next stage, which includes a cross-appeal by the liquidators, is expected to be heard in the Court of Appeal early next year.
The director defendants deny liability, while the liquidators say the amount to pay in damages should be higher.