Dispute threatens to prolong creditors' wait
A clash between a lawyer representing Blue Chip investors and the companies' liquidators over the best way to recover money from its directors could prolong the wait for creditors.
Barrister Paul Dale, who took about 250 Blue Chip investors to a Supreme Court victory on a separate matter last month, has been agitating for the company's liquidators, Jeff Meltzer and Arron Heath, to take a civil claim against Blue Chip's directors for some time.
Blue Chip collapsed in February 2008, owing 2000 investors an estimated $80 million.
Dale had publicly criticised Meltzer and Heath for not acting quickly enough to recover funds from the directors for dispersal among investors.
Dale was due to argue for the removal of Meltzer and Heath as liquidators in the High Court at Auckland yesterday, but instead he has vacated the application and is now keen to co-operate with the liquidators on a combined civil claim.
However Meltzer was not so receptive to the idea yesterday.
“We're not working together with Paul Dale, Paul's taking his own separate actions,” Meltzer said.
“They're different people he's representing, different actions and he's not involved in any aspect of the work that the liquidators are doing.”
The impasse is due to be addressed by a High Court judge in October and the case cannot go forward until the structure of the claim is settled.
In January, Dale filed a civil claim on behalf of investors against Blue Chip's directors, including former Cabinet ministers Wyatt Creech, John Luxton and the scheme's founder, Mark Bryers.
The liquidators had also filed a similar claim against the directors and Dale has since withdrawn his application to remove them from managing the companies. Meltzer said his claim was filed on November 30 last year, almost two months before Dale's suit was filed. [Due to incomplete information supplied, an earlier version of this story said Dale's application was filed first.]
“We had been concerned about the lack of progress by the liquidators and that's why we applied to have them removed, but we understand there is some progress being made," Dale said.
“I would expect there would be co-operation [on the civil claim], I don't see why there wouldn't be; we're both after the same thing.
“We did apply to have them removed and we've withdrawn the application, but yeah, we expect to co-operate and I think the court will expect us to co-operate - we're not at war.”
In January liquidator Meltzer said he would welcome anything that was going to maximise returns for investors and was happy to talk to Dale's team.
However, he had changed his tune yesterday.
Meanwhile, Meltzer said the liquidators for another Blue Chip entity, Northern Crest Investments, formerly the publicly listed company known as Blue Chip Financial Services, had agreed to join with him to pursue the civil claim.
The liquidators' action was focused on a specific group of investors during the period between 2004 and 2006 when Blue Chip sold yet-to-be built apartments in three downtown Auckland developments.
The developments were onsold and built by other parties.
That left the original investors high and dry.
Dale said his claim was borne out of concern for the wider group of investors - not just the three developments and $40m worth of claims that the liquidators had chosen.
“We are hoping that we're going to get some degree of co-operation because it is important that the investors are protected and these claims are pursued.”