The liquidator of Property Ventures Ltd (PVL) has dropped former managing director David Henderson from its lawsuit against the directors and insurer of the failed investment group saying the former bankrupt has no assets to satisfy the claim.
In a note dated November 2, Judge Graham Lang said Henderson was no longer a party to the proceeding, which is set down for a substantive hearing starting in February next year.
He is the second defendant to exit the lawsuit after PVL's auditor PricewaterhouseCoopers reached a confidential settlement in August.
Judge Lang's note says Walker's QC Justin Smith had submitted a joint notice of discontinuance in which each of the remaining defendants indicated their consent to the claim against Henderson being discontinued.
The issue of costs remains outstanding and Lang gave Henderson until December 1 to file any memorandum in support of an application for costs.
That leaves six defendants in the lawsuit - former PVL chair Austin Forbes, Alister Johnston, Gordon Hansen, Adolf de Roos, Daniel Godden and Vero Liability Insurance, which is a third-party defendant in the case.
PVL failed in 2010 and was subsequently put into liquidation. Henderson was bankrupted that year and has since been discharged although he's banned from being a director.
Liquidator Robert Walker said the litigation against Henderson was discontinued "following the assertion that he has no assets with which to satisfy the judgement debt."
"The only element of the claim remaining was an application to ban Mr Henderson as a director under the Companies Act, however, he has already been banned from being a director in accordance with the Insolvency Act," Walker said in a statement.
"As liquidator, our responsibility is to the out of pocket investors and creditors of PVL, our focus is on the remaining directors and Vero Liability Insurance as third-party defendant in the case."
Walker's lawsuit is being bankrolled by litigation funder LPF Group, which took up a position as a creditor after buying debt held by Allied Farmers. Under its funding agreement, it gets a share of any settlement.
Henderson said in an email that the lawsuit was being driven by LPF Group and "none of this is about recovering money for creditors." PWC "paid out just to avoid wasted time and unrecoverable legal costs."
Henderson challenged his conditional discharge from bankruptcy - his second, having previously been bankrupted in 1996 and discharged in 1999 - although the appeal was dismissed.
In dismissing the appeal, the Court of Appeal noted that Associate Judge Rob Osborne, in granting the discharge, had been satisfied "that the root causes of Mr Henderson's bankruptcy were profound and endemic to his character."