Hamish Fletcher

Business reporter for the NZ Herald

Mainzeal's Yan fails in bid to stall liquidation

Richard Yan is the sole director of Richina Global Real Estate. File Photo
Richard Yan is the sole director of Richina Global Real Estate. File Photo

Mainzeal director Richard Yan has failed in his urgent High Court bid to stall the liquidation of a company within the collapsed construction business' wider group.

Yan, however, is now seeking relief in the Court of Appeal - which could be heard next week - that will essentially try to restrain the liquidators from taking further steps until a wider argument before the appellate court takes place over whether the company should have been put into liquidation.

Read today's full court decision here.

Richina Global Real Estate, whose sole director is Yan, was put into liquidation on February 27 by Justice Brendan Brown after an application by BDO, the liquidators of Mainzeal Property and Construction.

Mainzeal, whose former board members included ex-Prime Minister Jenny Shipley, was a building business which collapsed in 2013 leaving 2000 unsecured creditors at the time claiming an estimated $93.5 million.

Following the court order last week, BDO was also appointed liquidator for Richina Global Real Estate (RGREL).

Yan has filed an attempt to overturn the RGREL liquidation order with the Court of Appeal.

But on Tuesday his Queen's Counsel, David Chisholm, also made an urgent application to the High Court to stay Justice Brown's judgment, effectively trying to put the liquidation order on hold while they wait for the appeal.

One of Chisholm's arguments was that BDO should never have been appointed as RGREL's liquidators because they are also the liquidators of Mainzeal and therefore have a conflict of interest.

Mainzeal's lawyer, Zane Kennedy, argued the court didn't have the jurisdiction to stay the liquidation order as it had already been executed.

"The court can't say now, because it simply doesn't have the jurisdiction, that we're going to stop the order which is already executed and we're going to roll the clock back and pretend it hasn't occurred," he said on Tuesday afternoon.

One of the issues raised during the urgent hearing was that BDO could abandon RGREL's fight against orders requiring it to pay $15.2 million to Mainzeal and $5.8 million to another company, Richina Land Limited.

RGREL has alleged that the liquidators of Mainzeal acted improperly in obtaining these orders.

In his decision, released yesterday afternoon, Justice Brown declined Yan's bid for the stay on the liquidation order.

The judge did, however, say that pending the appeal against the liquidation, BDO were not to abandon RGREL's fight against the payment orders to Mainzeal and Richina Land Limited.

While the urgent bid failed, Chisholm told the Herald this morning that Yan will now seek interim relief at the Court of Appeal, essentially seeking to restrain BDO from taking further steps in the liquidation, pending the more substantive fight in the appellate court over the liquidation order.

- NZ Herald

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