Creditor feelings run high
Dame Jenny Shipley should hand in her damehood and resign all directorships while her fellow Mainzeal directors should be pursued for personal assets, according to a creditor who lost about $1.4 million.
Knighthoods and damehoods are awarded for meritorious service to the nation or to people who have become distinguished by their eminence and talents.
Tim Smith, the owner of Smith Cranes, said people had lost homes, businesses and marriages from the Mainzeal fiasco, and all the directors were ruled culpable.
Smith said he doubted he would get much money back from the judgment against Mainzeal directors. Unsecured creditors were still owed more than $110m.
His company lost a similar amount when the legacy company of Hawkins Construction was placed in receivership.
‘‘It’s only because I have a substantial business I’ve built up over 30 years that we’ve been able to take it on the chin . . . But it makes a big hole in your profitability for a year.’’
He said the legislation requiring head contractors to keep subcontractor retention payments was akin to ‘‘putting the weasels in charge of the henhouse’’.
Taggart Earthmoving owner Paul Taggart was also doubtful about receiving much back.
‘‘We lost $350,000. I don’t think they’ve got the legislation right.’’
The liquidators engaged professional litigation company LPF to take the case against the Mainzeal directors.
LPF will take a fee equal to about 30 per cent of the $36m judgment, leaving roughly $24m for unsecured creditors depending on other costs of the receivership.
If the Mainzeal directors appeal, the case could take years to reach a conclusion if it went as far as the Supreme Court. But equally, the appeals could go against them and even higher awards could be made against the directors, said a lawyer who wished to remain unnamed.
The directors’ insurance providers will decide whether to continue the case.
Liquidator Andrew Bethell of BDO said LPF would be at the front of the line for any payments.
The liquidator’s reports show secured creditor Bank of New Zealand was repaid $11m, and about $4.6m remains available for unsecured creditors currently.
Alex Sims, an associate professor of commercial law at the University of Auckland, said the case showed the limitation of law.
Mainzeal’s collapse saw some subcontractors go into liquidation and the amount directors have been fined was a fraction of the money creditors lost.
Subcontractors carried the risk on behalf of the New Zealand construction industry, she said.