Mainzeal collapsed in 2013 owing creditors $110 million. Photo: RNZ / 123RF
Subcontractors still owed big chunks of money from construction firm Mainzeal's collapse a decade ago say they will get a pittance back and do not believe justice has been served.
Former Prime Minister Dame Jenny Shipley and her fellow directors of Mainzeal have lost their Supreme Court appeal and must now pay $40 million plus interest for reckless trading.
The directors breached the Companies Act when they knew the firm was insolvent but continued to trade, leaving creditors and subcontractors $110m out of pocket.
Unsecured creditor Doug Haselden, the owner of South Island Shotcrete, is still owed $264,000.
"They only got made to pay $40 million that's nothing. It's actually more of a slap in the face. It's like a reminder of what I should've had," he said.
"I had to really work hard, I had to get two bloody jobs and everything to survive through that."
In the very courtroom that Mainzeal built, the company's former chief executive Richard Yan has been ordered to pay much of the $39.8m, with lesser amounts for Dame Jenny and the other two directors Clive Tilby and Peter Gromm.
Haselden said he took on extra work as a mechanic to keep his concrete business afloat.
On Friday, Justice William Young delivered the judgement on behalf of the Supreme Court.
The court found that from 2008, directors were aware that Mainzeal was generating little or no profit.
"In short, from 31 January 2011 the directors allowed Mainzeal to trade in a manner that was likely to and did create a serious risk of substantial loss to creditors," Justice Young said.
"That Mainzeal was trading in such a manner would have been apparent to the directors if they had acted with reasonable skill and diligence."
The liquidator Andrew McKay said the directors 'robbed Peter to pay Paul' in trading while insolvent and he was committed to recovering the money.
But Richard Yan, its former chairman who is ordered to pay most of the damages, is in China.
Haselden does not expect Yan to pay up.
"Nothing. Absolutely nothing. What can happen to him?
"I've spoken to several receivers and the receivers are the only ones making money out of this. I'll only get eight cents of the dollar that I'm owed. I'll only get $18,000 and then I've got to pay tax on it."
He said it was white collar crime and deserved a penalty.
"I'm a director myself and I wouldn't dare go into something knowing I've got $280m worth of debt and carry on trading. Holy moly you know they should be pulled up."
Another unsecured creditor, who wishes to remain anonymous, said his company was owed a substantial amount - he would be paid very little of it.
"Pretty disappointing. It was even worse at the time but looking at it now there's just no comeback on the directors really. It's all covered by insurance it's not going to cost them anything personally."
He said today's ruling was bittersweet but did not change the fact he was out of pocket.
"It really hurt us at the time, had a big impact on the business. We were just lucky we were able to trade through it and we'll just put it behind us now and carry on with life."
The Mainzeal directors must also pay costs of $65,000.
The lawyers representing the directors said they were deeply disappointed their appeal was dismissed and continue to regret the collapse of the company.
