One of three former directors of the now-liquidated Rotorua vehicle transportation firm Mills-Tui Alloy has been declared bankrupt.
Hilton McLachlan, with John Wilmshurst and Peter Bradley, ran the company that went bust this year owing creditors more than $2 million.
He was declared bankrupt at the Rotorua District Court.
The judgment has comeas a minor victory to many of the nearly 180 unsecured creditors who had attempted to recoup costs, particularly Bay Panel & Hardware Supplies owner David Bagnall, who initiated court action against McLachlan.
Bay Panel was owed $19,000 by Mills-Tui Alloy. The company's chances of recovering what is owed were wiped out when Mills-Tui Alloy went into liquidation in July.
Documents supplied to the Daily Post show McLachlan made personal guarantees to eight companies totalling $409,815.
A statement of his accounts shows, apart from $100 cash in hand, he has no assets.
Bagnall said he took no joy in seeing McLachlan declared bankrupt. However, he was not satisfied justice had been served.
He had a letter addressed to his lawyers from McLachlan stating he had a $600,000 tax loss levied against him. "That means the next $600,000 any of [the directors] earn, they don't have to pay any tax.
"When you compare that to the case of the guy who got 15 months just for pirating DVDs, well I can't see that there is any fairness or justice in the legal system."
But another Mills-Tui Alloy creditor, who did not wish to be named, said McLachlan had been unfairly vilified and had largely carried the can for his former colleagues' mistakes.
"Hilton has been used as a scapegoat for Mills-Tui and its demise.
"We still have business dealings with him indirectly and he has stood by us as much as he can. I don't hold any ill feeling toward him whatsoever."
The Companies Office website shows McLachlan has resigned as director from five companies - Minginui Holdings, Tuff Plastic Moulders, HED Developments, Total Engineering and Rybo Holdings.
A former success story, Mills-Tui employed about 50 people 18 months ago. McLachlan, Bradley and Wilmshurst had bought what was an ailing business in August 2002, merging it with an engineering company and renaming it Mills-Tui Alloy.
