12 Nov 2018

Mainzeal directors should've said they'd resign: lawyer

3:51 pm on 12 November 2018

It's been argued that if Mainzeal's directors had threatened to resign, they could have averted the company's spectacular collapse.

Construction site. (file pic)

Photo: 123rf

Mainzeal went into liquidation in 2013 owing creditors about $117 million.

The lawyer for Mainzeal's liquidators, Mark O'Brien, said if Dame Jenny Shipley and the other Mainzeal directors had threatened to resign over loans the company was owed, it's possible none of this would have happened.

The construction giant had lent money to other entities owned by their common parent company, Richina.

And it had been wrongly assumed that Richina would provide the financial backing Mainzeal needed.

Mr O'Brien said if the Mainzeal directors had threatened to resign over the loans it could have forced the issue and prompted Richina to make good on what was owed.

"Had they, at the end of 2010, done what we say they should have done and pushed and prodded to get actual support in the door and, if necessary, threatened - gently perhaps or less gently if necessary - to resign or to cease trading, then it is quite possible something could have come in."

The directors are accused of reckless trading while insolvent and it's claimed they should have brought in the liquidators long before the company ultimately went under.

The trial, now into its ninth week, is expected to conclude tomorrow.

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