Court action against the directors of the collapsed Blue Chip group is all but over after the liquidators of group subsidiaries, Jeff Meltzer, Arron Heath & Lloyd Hayward (Meltzer Mason Heath), confirmed in the Auckland High Court on Tuesday they didn’t have the funding to continue.
That case was among several strands in the liquidation of the group & its parent, Northern Crest Investments Ltd, which have periodically been brought before Justice Paul Heath since Northern Crest (ex-Blue Chip Financial Solutions Ltd) was wound up on 2 June 2011, with Anthony McCullagh & Steve Lawrence (PKF Corporate Recovery & Insolvency (Auckland) Ltd) appointed liquidators.
The Meltzer Mason Heath) trio were appointed liquidators of the New Zealand subsidiaries in February 2008. In their last report, in August 2012, they said they’d made minimal recoveries and didn’t expect any dividend to become available for creditors.
Northern Crest’s liquidators said in their last report, on 19 December, they’d accepted a secured claim for $4.75 million and 17 unsecured claims totalling $10.17 million, but not even preferential creditor Ross Haywood, claiming $4900 in court costs, is likely to get a payout.
There have been multiple applications before Justice Heath. A group of Blue Chip product investors known as the investor consortium, represented by lawyers Paul Dale & Daniel Grove, called for the Official Assignee to be appointed liquidator of the parent (NZ-incorporated, now Sydney-based) Northern Crest and of former New Zealand subsidiaries, but dropped that application last year. They also wanted recoveries to be pooled, which is no longer relevant given the lack of recovery.
Mr Dale said yesterday his group believed it could have secured litigation funding to pursue the directors provided the liquidators were changed. About 250 investors in Blue Chip schemes won some money back through a confidential settlement with developers following the Supreme Court’s unanimous ruling last August that sale & purchase agreements on apartments they bought were unenforceable.
The complicated litigation over the course to be followed in the liquidations has been adjourned until April.
5 November 2012: Trial on Blue Chip liquidation process pushed back to 2013
13 August 2012: Forward 2 years, and the Supreme Court decrees that Blue Chip investors were the lenders
13 August 2012: What was the Blue Chip business all about?
9 August 2012: Blue Chip investors win in 5-0 Supreme Court decision against developers
9 May 2012: Blue Chip liquidation, claims & pooling head to July court hearing
Attribution: Interview, story written by Bob Dey for the Bob Dey Property Report.