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Blue Chip's liquidators have suspended legal proceedings against former directors, including ex-cabinet ministers Wyatt Creech and John Luxton, lawyer Jock Irvine and the scheme’s founder, Mark Bryers.
In a statement this afternoon, Jeff Meltzer, Arron Heath and Lloyd Hayward of Meltzer Mason Heath say they are suspending legal proceedings commenced against various parties in connection with the collapse of the Blue Chip Group in early 2008.
Mr Meltzer said the decision was taken reluctantly but an inability to obtain all the funding required to continue with the proceedings “forced their hand”.
“It is lamentable that, in the case of assetless liquidations, such as the Blue Chip Group, major litigation that could benefit creditors either has to be funded by commercial litigation funders or by the creditors themselves, or the Liquidators.
“In the case of Blue Chip, the scale and complexity of the proceedings have proved too challenging for potential funders and we as liquidators can no longer continue to meet the costs of litigation.
“The liquidators are extremely disappointed with this outcome as there have been years of work from a dedicated team of professional accountants, lawyers and experts in preparing and filing the proceedings.
“The liquidators have used their best endeavours to pursue the defendants for the benefit of the creditors and to date have personally funded significant sums towards the investigations and legal proceedings.”
The legal action related to 800 investors who paid Blue Chip almost $40 million in deposits between 2004 and 2006 for apartments that were never built.
Mr Meltzer said that creditors would be advised as soon as possible as to the next steps in the liquidations.
The Blue Chip property scheme and web of related companies collapsed in February 2008 owing an estimated $80 million to 2000 investors.