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Former Bridgecorp board member Peter Steigrad has succeeded in throwing out a High Court declaration blocking him and two other of the failed finance company's directors from accessing an insurance policy worth up to $20 million.
Steigrad was convicted in April of making untrue statements in Bridgecorp's offer documents, and in May was ordered to complete nine months of home detention, 200 hours of community work and pay $350,000 in reparations.
Before this trial, in which he found guilty of six Securities Act charges, Steigrad and two other Bridgecorp directors went to the High Court in a dispute over access to a directors' and officers' insurance policy that has a limit of $20m.
The policy, taken out with QBE Insurance, indemnifies the men against liability they might incur as a result of their actions as directors. It also provides cover for costs they might incur in defending proceedings that seeks to establish this liability.
The High Court stoush over the insurance involved the receivers of the collapsed Bridgecorp companies claiming they had a "charge"over the money payable in the policy for the amount they intended to claim from the directors in civil proceedings.
After hearing the case, the High Court's Justice Graham Lang ruled last year the charge applied to the money, which then prevented Steigrad and fellow directors Bruce Davidson and Gary Urwin from having access to the insurance money.
The receivers have since filed a civil claim against Steigrad, Davidson and Urwin for $442m for an alleged "breach of duty".
Steigrad then went on to appeal the insurance decision in September, which was allowed today by Justices Mark O'Regan, Terence Arnold and Rhys Harrison.
"The declaration made by the High Court is quashed," the Court of Appeal Justices said this morning.
While this decision plays in the Bridgecorp directors' favour, it doesn't necessarily mean the trio have access to the insurance policy.
Davidson's lawyer, Colin Carruthers QC, said this morning there was "still an issue"between the directors and QBE.
- Hamish Fletcher of the NZ Herald