Liquidator: Mainzeal owes even more than was claimed

AUCKLAND: When Mainzeal collapsed it owed creditors millions more than has been claimed, the liquidator for the failed construction firm says.

The former construction giant went into liquidation in 2013 amid claims of governance failures and reckless trading.

About $117 million in claims were filed against Mainzeal following its collapse, but liquidator Andrew Bethell told the Auckland High Court it in fact owed creditors far more.

‘‘The liquidators have admitted $117 million of creditor claims out of $157 million received. In reality creditors have lost many millions more than that due to claims not being filed.’’

It is alleged that Mainzeal gave millions of dollars in loans to affiliated companies and did not take appropriate steps to recoup debts when they were not paid.

The court was told yesterday that it should have been apparent as early as 2008 that it would not get the money it was owed.

The directors had also continued to take on large construction contracts even while leaky building claims against it continued to stack up.

Mr Bethell was highly critical of the directors for not insisting on repayment of owing loans.

‘‘In the circumstances, I believe this showed a reckless disregard for the interests of creditors.’’ — RNZ