Mainzeal Property and Construction Limited (in liq)
v Yan & Ors [2019] NZHC 255
When Mainzeal Property and Construction Limited
(Mainzeal) collapsed in February 2013, it left behind a
raft of unsecured creditors who were jointly owed just over $110
million. The proceedings brought by Mainzeal's liquidators
against its former directors were for the effective benefit of
these creditors.
The liquidators' principal claim was that the directors had
engaged in reckless trading, and in doing so had breached their
duties under s 135 of the Companies Act 1993 (Act). In finding that
the liquidators' claim was made out and total compensation of
$36 million was payable by the directors, the High Court has sent a
strong signal against the dangers of companies continuing to trade
whilst insolvent.
