Liquidator still pursuing Dave Henderson and directors after PwC settlement
The liquidator of Christchurch-based Dave Henderson's Property Ventures is continuing his claims against directors of the group after an out-of-court settlement with auditors PwC.
Wellington-based accountant Robert Walker said a court date had been set for early February and the amount under claim could be as high as $600 million.
The High Court has approved a reduction in money Walker was required to provide for security of costs – an amount he must make available in case his lawsuit fails and could be used to satisfy costs of the Property Ventures directors.
Following the recent confidential settlement with PwC, the High Court has reduced a security of costs amount from $1.2m to $720,000, which Walker's litigation funder LPV is expected to come up with.
The amount was reduced by High Court Justice Graham Lang because the length of the case will be shorter with PwC no longer involved.
Originally, the total amount of security of costs was $2.7m of which $1.5m has already been provided.
Even so, Justice Lang expected the trial to last for 12 weeks and said it could even go longer.
The Property Ventures directors tried to challenge the adjustment, saying it was premature to gauge the shape of the trial.
Included in the final amount is several hundred thousand dollars as a provision to pay for expert witnesses.
Christchurch barrister Austin Forbes QC is first defendant because of his role as director of Property Ventures from 2004 to just before its collapse in 2008, and his chairmanship after 2005.
Next in line is Auckland-based director Alister Johnston, followed by Christchurch accountant Gordon Hansen, Dave Henderson, Phoenix-based wealth adviser and author Adolph de Roos, and former general manager Daniel Godden.
Liquidator Walker holds a claim against any payout on the directors' insurance policy with Vero.
His claim will allege breach of fiduciary duty over such things as Property Ventures' claims of financial health even though previous auditors Grant Thornton had queried that the company was a going concern, before being replaced after 2006 by PwC as auditors.
Other claims will relate to valuations of properties, the intermingling of the affairs of subsidiaries, development delays, and payment of creditors.
Property Ventures and Henderson obtained funding from South Canterbury Finance as late as August 2008 but the following year the Ministry of Economic Development began to investigate the company's solvency and in March 2010 receivers were appointed.
Henderson has subsequently been discharged from bankruptcy but remains under supervision and prohibition from personal guarantees in relation to borrowing.
Interests associated with him recently purchased back the SOL Square buildings in Lichfield St and it is expected they will be redeveloped.
Henderson said the court cases being pursued by Walker were not in any noble cause.
He described them as childish because they would not result in any significant benefit to creditors and showed the dysfunction of the court system.
Henderson said he understood the confidential settlement with PwC was for a small amount, "a tip at a restaurant", and he had also been approached about a settlement which he rejected.