Mainzeal liquidators reject claims totalling $16.7 million

Article – BusinessDesk

Mainzeal liquidators reject claims totalling $16.7 million

By Paul McBeth

March 31 (BusinessDesk) – The liquidators of the Mainzeal group of companies that started collapsing on Waitangi Day in 2013 have rejected $16.7 million of claims, or about 11 percent of what’s sought by out-of-pocket creditors.

BDO’s Andrew Bethell, who was appointed liquidator of the Mainzeal group, said his team has reviewed 1,223 of the more than 1,400 claims from creditors owed $153 million, rejecting about a tenth of them, according to the latest report on the administration. Bethell is looking to realise any remaining receivables, and is pursuing legal action against Mainzeal’s former directors, which will determine what, if anything, is paid out to creditors.

The liquidator filed papers in the High Court against Mainzeal’s former directors, including ex-Prime Minister Jenny Shipley, principal Richard Yan, one-time Brierley Investments head Paul Collins, Mainzeal chief Peter Gomm, and Clive Tilby, claiming they breached their duties in relation to a series of restructuring two years before Mainzeal’s collapse, reckless trading, and claims against other parties.

“The liquidators have secured third-party funding enabling them to conduct the litigation,” Bethell said in his report. “The matter is before the court and may take a significant amount of time to reach its conclusion.”

All of Mainzeal’s preferential creditors, including staff and Inland Revenue, have been paid, and the liquidators expect to complete their review of unsecured claims by their next report in six months.

The Mainzeal liquidators have had to contend with court action from the construction group’s principal, Richard Yan, who opposed the inclusion of Richina Global Real Estate (RGRE) and Isola Vineyards to the administration.

Last year, the Court of Appeal upheld Yan’s bid to set aside the liquidation of RGRE and exclude Isola Vineyards, saying it was premature to do so before disputed debts were determined. Prior to the hearing, the liquidators had complained about the veracity of information they had received relating to RGRE.

The liquidators had previously said they were investigating RGRE’s transactions with related parties in New Zealand and internationally, including the restructures of related party debts that occurred around July and December 2012, saying the commercial rationale wasn’t evident.

The December 2012 restructure saw the $15.2 million debt owed to Mainzeal Property & Construction transferred to MGL Trading in exchange for shares.

Related companies Mainzeal Property & Construction and Mainzeal Living were tipped into receivership on Feb. 6, 2013, and 200 Vic joined them on Feb. 13. Liquidators were appointed to the Mainzeal group later that month on Feb. 28.

The receivership of Mainzeal Property & Construction left a surplus of $1.1 million for the liquidators of the wider group, who represent unsecured creditors. The receivers were appointed by BNZ, which was owed $11.3 million, the bulk of which was over the Mainzeal headquarters building on Auckland’s Victoria St.


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