One of the biggest civil court actions in New Zealand legal history has been filed against the former directors of failed finance company Bridgecorp.
Bridgecorp receivers PricewaterhouseCoopers (PwC) has filed civil action in the High Court at Auckland for $442 million against the three of the five former directors.
PricewaterhouseCoopers' lawyer Murray Tingey said it was claiming the money from the former directors for "breach of directors' duty".
Rod Petricevic, Rob Roest and Peter Steigrad, Gary Urwin and Bruce Davidson, who was also the chairman, were directors of Bridgecorp when it collapsed in July 2007 owing 14,500 people around $490 million.
Petricevic and Roest have since been declared bankrupt, exempting them from the legal proceedings.
Mr Tingey said while Bridgecorp was not the biggest finance company that has collapsed in New Zealand, it may be involved in one of the biggest civil claims against one.
James Farmer QC said the biggest civil court judgement he was aware of was the Equiticorp judgement against the Crown in the mid 1990s.
Mr Farmer acted for the statutory managers, who were awarded $400 million.
Mr Farmer said the payout was the biggest civil judgment at that time.
Simpson Grierson partner, Graeme Christie said the case was "certainly up there as one of the more significant claims in New Zealand".
"I would have thought that that [$442 million] is up there as one of the biggest, if not the biggest, civil suit in New Zealand."
It is understood that if Steigrad, Urwin and Davidson lose the court action any damages awarded will be chased until a summary judgement is heard.
If payment is then not received, a bankruptcy will be ordered, leaving it up to the official assignee to reclaim any money through dissolving assets.
In late July this year, Bridgecorp investors received a second payout from PwC, taking the current total recovered to eight cents in the dollar.
A PwC receivers report last month advised investors it was unlikely more than 10 cents in the dollar could be returned.
The PwC receiver declined to comment while the case was before the court.
Semi-retired Waikato dairy farmer Brian Gordon said he and his wife Sheryll lost $200,000 in the Bridgecorp collapse.
Mr Gordon, 63, said he was pleased to hear the former directors were still being chased for the money that he lost.
"Initially I hoped that they spent a few Christmas' in jail, and that's about all that I thought I would get."
"I guess, ultimately, we'd all like our money back but I know that's not going to happen."
He said he had so far got around $18,000 back.
"We're not happy of course, but every cent we get back is good."
Steigrad's lawyer Brian Keene said a defence had been filed on behalf of each of the directors involved in the civil case.
"I think that if you spoke to the receivers they would say they are interested less in Mr Steigrad or Mr Davidson, whose personal assets wouldn't actually make any real impact upon a creditor pool, and much more upon whether they can get money out of the insurance policy."
Mr Keene said the receivers' actions had tied up the insurance policy and prevented any payout.
"It's become one of those legal tangles and what lawyers are going to have to do is to try and make sure that money gets to investors as opposed to spending lots of time and money on cases which are too full of bravado."
Davidson's and Urwin's lawyers could not be reached for comment.
Bankruptcy
* Bankruptcy can be filed by lodging a "debtor's petition" with the Official Assignee. Alternatively a creditor can declare someone bankrupt through a "creditor's petition" at the High Court if they are owed over $1000.
* The Official Assignee is part of the New Zealand Insolvency and Trustee Service and acts as trustee, administering debts incurred up until a bankruptcy has been declared.
* The bankruptcy is then advertised in a local newspaper and the New Zealand Gazette.
* Possessions, including properties, cars, appliances, life insurance policies and superannuation schemes, can be sold or cashed in to repay creditors.
* Bankrupts still run their own bank accounts, although the Assignee can look into them periodically and large sums can be taken to pay creditors.
* Bankrupts cannot own a vehicle worth more than $5000, or travel overseas without the Assignee's consent.
- Brendan Manning of APNZ
