The Hanover Finance case took another tentative step towards closure yesterday with revelations the finance company's directors and promoters were undertaking settlement negotiations on the eve of a long-awaited trial.
A Court of Appeal judgment said Hanover failed in mid-2008, causing substantial losses to depositors. About 16,000 people with investments totalling more than $500 million lost most of their money following the failure of Hanover and related companies, and the sale of assets to Allied Farmers.
The Serious Fraud Office investigated the case for nearly three years before declining to lay charges but handed its findings to the Financial Markets Authority which laid civil proceedings.
The FMA is seeking $35 million from Hanover directors and promoters Mark Hotchin, Eric Watson, Gregory Muir, Sir Tipene O'Regan, Bruce Gordon and Dennis Broit, arguing investors were misled in advertisements and the company's prospectuses.
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The defendants deny the claim, and the case is set down for a 12-week hearing beginning at the High Court at Auckland on September 7.
Yesterday the parties attended a judicial settlement conference before Justice Sarah Katz, unusually attended in-person by Watson.
In February last year it was revealed that - ultimately unfruitful - settlement discussions were underway, and court guidelines say judicial settlement conferences are most appropriate where parties are intransigent or private mediation has failed.
A spokesman for the FMA said yesterday's appearance was a "standard step in the litigation process".
The spokesman said further comment would not be forthcoming "as the matters remain before the courts."