When Mainzeal collapsed it owed creditors millions more than has been claimed, the liquidator for failed construction firm says.
Photo: 123rf
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 $117m of creditor claims out of $157m received. In reality creditors have lost many millions more than that due to claims not being filed."
This included a $46m claim from AMP Capital in relation to its Botany Town Centre development, which was never followed through.
It is claimed that Mainzeal gave millions of dollars in loans to affiliated companies and did not take appropriate steps to recoup debts when it was 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.
Dame Jenny Shipley Photo: Dan Childs Photography
The directors, who include former prime minister Dame Jenny Shipley, had been counting on Mainzeal's parent company, Richina, to provide the finance it needed, but this never happened.
The directors had also continued to take on large construction contracts, while leaky building claims against it continued to stack up.
Mr Bethell was highly critical of the directors for not insisting on repayment of loans it was owed.
"In the circumstances, I believe this showed a reckless disregard for the interests of creditors."
He said Mainzeal should have ceased trading years before it did and not doing so put creditors' money at risk.