Mainzeal claims detailed, payout unknown

The liquidators of Mainzeal Property and Construction have received $93.5 million of claims from unsecured creditors and are yet to decide on options for legal action. "Further actions will be subject to availability of funding and an assessment of the benefits of pursuing recoveries," Andrew Bethell, Brian Mayo-Smith and Stephen Tubbs of BDO say in their first report. They are yet to say how much, if anything, preferential and unsecured creditors will be paid and have not detailed the cost of the liquidation. Mainzeal collapsed in February, putting the future of major construction projects around the country in jeopardy. There have been calls to protect the position of subcontractors and investigate the related-party transactions in the Mainzeal Group. Business commentator Brian Gaynor has held the business failure up as an example or poor governance. The company's board included former Prime Minister Dame Jenny Shipley. The liquidators have received $95.3m of claims from unsecured creditors, including $11.5m from employees, $51.7m from trade creditors, and $18.3m from sub contractor retentions. The company has $95m of assets, comprising $72.7m of related-party assets. Their estimated realisation value is recorded as unknown. The report says that the main trading company MPCL relied on support from entities outside New Zealand. "It appears that the recent withdrawal of that support was the catalyst for the remaining director to appoint receivers," the report says. A list of causes of the group's demise included the loss of a number of large construction contracts and an adverse settlement on a major infrastructure contract. 3news