Former directors of Pike River Coal are now tasting quite a bit of the "name and shame" odium which was directed at former chief executive Peter Whittall over the fatal mine explosion on the West Coast.
In her damning judgment against what was in many respects a phantom company on trial, Judge Jane Farish was clear about where the buck should stop.
Judge Farish's condemnation has resonated across New Zealand. She not only entered convictions against the company over the nine health and safety breaches she considered causative of the explosion which killed 29 miners, but fined Pike River Coal $760,000 and awarded $110,000 to each of the victims' families and the survivors. A total of $3.41 million.
Lawyers for three New Zealand-based Pike River Coal directors - former chairman John Dow, Ray Meyer and Stuart Nattrass - say the company did not "walk away" from the families after the explosion, as indicated by Judge Farish.
But frankly, the level of payments from Pike River Coal after the disaster, and those provided through the back door by former shareholder NZ Oil & Gas (NZOG) which stumped up $500,000 for a miners' relief fund, was derisory.
So too is a corporate culture that allows a company in receivership to stand trial on health and safety breaches, with no defence provided via funds extended either by the receiver or the former key shareholder, no counsel present at the sentencing hearing and without its directors being roped in to face the music.
"Given the amounts owing to creditors, the receivers did not consider it in the economic interest of creditors to spend the limited funds available to the company on any defences to the charge," said PricewaterhouseCoopers.
In fact, the major economic interest that PwC is protecting is NZOG, which had a total creditors' exposure of $39.2 million at June 13.
It is extraordinary that Whittall is the only person associated with Pike River Coal's former board and management facing criminal charges in his own right. His own former boss, Gordon Ward, who was managing director and chief executive from May 2007 until October 2010, was never brought back to New Zealand to either front the various inquiries or face potential charges. Yet Whittall, who was formerly general manager of mines before becoming chief executive, had less than two months in the job before the explosion.
Pike River Coal has itself been in receivership since November 2010. But NZOG - which has previously extended the receiver working capital - could surely have been prevailed upon again. It did after all supply the leading players on the board and continue to extend financial facilities to fund Pike River Coal's operations at a time when there were known concerns within the company over its methane management and strong pressure from the board on the executive to deliver. Two Indian corporate shareholders also had directors on the Pike River board.
NZOG wasted no time in appointing receivers to Pike River Coal after the major explosions in late 2010.
At the time Pike River Coal went into receivership it had $10.9 million cash, according to PwC.
PwC's first statutory report showed that at December 13, 2010, the total amount owed to Pike River Coal's secured creditors was $74.966 million. NZOG's slice of that was $51.355 million ($39.262 million in convertible bonds and $12.073 million through a short-term facility); the others were BNZ ($22.412 million) and Solid Energy ($1.217 million).
NZOG also had a $13.21 million short-term unsecured exposure.
Of the $110.412 million total creditors' claims received by PwC, various facilities extended by NZOG accounted for $64.565 million - just over 58 per cent of the total.
Subsequent reports show NZOG extended considerable funds to PwC to finance the receivership.
Pike River Coal hadn't run out of cash when NZOG pulled the plug. The receivers reported it had $10.9 million cash. But it had no prospect of making a crust in the medium term after the explosions and ongoing methane leakage ruled out the prospect of more coal mining at the site, which was its major asset.
Things looked bleak, but Pike River Coal did have one important asset - extensive insurance capped at $100 million. In December 2011, the receivers announced they had managed to prise out $80 million. BNZ was paid out in total (Solid Energy had already been paid) and NZOG agreed that up to $10.5 million of the insurance proceeds should be directed to Pike River Coal's unsecured creditors (contractors and employees). Total payments under the plan were $9.2 million and enabled 240 unsecured creditors to be paid in full and 220 creditors to receive $10,000 plus 20c in the dollar owed.
In November that year, charges were laid against the Pike River Coal company - but not against the directors. By February 2012, NZOG was the only secured creditor left with a total secured exposure of $23.261 million and a $13.687 million unsecured facility.
Its total exposure of $64.565 million on December 13, 2010, had been reduced to $36.948 million. with $23.261 million secured ($4.8 million of which was receivers' advances).
Total creditor claims were down to $52 million.
The situation was relatively static at the time of the last receiver's report released in February this year. PwC said yesterday that at June 13, NZOG had a total secured exposure of $21.7 million and $17.5 million unsecured to give an overall exposure of $39.2 million.
PwC also said NZOG has been paid out $47.4 million in cash on the secured debt and a $2.56 million amount via a distribution to unsecured creditors.
Capitalised interest rates explain why the overall exposure remains at $39.1 million ($21.7 million secured; $17.5 million unsecured).
NZOG obviously wants to close the books on Pike River Coal as its chief executive said after Judge Farish's judgment. But its exposure to Pike River Coal's predicament is not simply a moral one.
It kept the funding tap going and kept pressure on for commercial results when the brakes, as its directors on the Pike River Coal board must have known, should have been applied.
NZOG should just write a cheque.