21 Mar 2011

Nathans in 'hopeless position' by time of collapse

9:59 pm on 21 March 2011

Nathans Finance was in a hopeless position by the time of its collapse, the Auckland High Court has been told.

The finance company was placed in receivership in August 2007, owing 7000 investors $174 million.

Three of the company's directors, Donald Young, Kenneth Moses and Mervyn Doolan, have reaffirmed their not guilty pleas on six alleged breaches of the Securities Act.

In his opening address on Monday, Crown lawyer Colin Carruthers, QC, told the court the case arose as the result of significant conflicts between the accuseds' interests in parent company VTL and Nathans' investors.

Mr Carruthers said the trio held an unreasonable belief in VTL's business model and it blinded them from their duties for Nathans.

The Crown alleges statements Nathans issued in its prospectus were untrue.