CBL Insurance liquidation hearing set for June

The High Court at Auckland / NZME file photo

A small army of lawyers descended on the High Court this morning in the stoush over whether or not liquidators should stay in charge of the embattled builders risk insurer CBL Insurance.

The main skirmish, however, won't happen until June.

CBL Corp appointed voluntary administrators in February after the Reserve Bank - which regulates the insurance industry - went to court to appoint an interim liquidator to its subsidiary CBL Insurance over concerns about its solvency and transferring $50 million offshore.

The moves came after CBL revealed that it had been under instruction by the central bank as far back as July but was subject to a confidentiality order which meant it had not told shareholders.

Trading in CBL Corporation shares has been suspended for months.

A fight over whether liquidators should stay in charge of CBL Insurance is expected and some three Queen's Counsel were among the lawyers who appeared in the High Court at Auckland this morning before Associate Judge Warwick Smith.

Seb Bisley appeared for the Reserve Bank while Davey Salmon was there for CBL managing director Peter Harris and deputy chairman Alistair Hutchinson.

Queen's Counsels Adam Ross (for CBL's main creditor) Nathan Gedye (for the interim liquidators) and Bruce Stewart (for shareholder LBC) were also in court.

Associate Judge Smith set a two day hearing in June.

While there is anticipated to be some argument about whether Harris and Hutchinson have standing to oppose the liquidation application, the judge said that can be contested at the June hearing.

The court also heard this morning that there may be debate over whether the two directors can get access to information held by the interim liquidators or access to employees of the company.