Hotchin off to Supreme Court in trustee case
Mark Hotchin’s legal team is off to the Supreme Court to argue Hanover’s trustees should share blame for alleged Securities Act breaches.
The FMA has launched proceedings against Mr Hotchin as well as Hanover co-founder Eric Watson and former directors Greg Muir, Bruce Gordon, Sir Tipene O’Regan and Dennis Broit over allegedly misleading or untrue statements made in offer documents during the period December 7, 2007 to July 22, 2008.
The FMA wants compensation for investors who put $35 million into Hanover Finance, Hanover Capital and United Finance. That trial had been set down for July next year.
However, Mr Hotchin is arguing trustees should share any blame and yesterday a Supreme Court panel of Justice John McGrath, Justice William Young and Justice Susan Glazebrook granted leave for Mr Hotchin to argue his case in this nation’s top court.
In the High Court Justice Helen Winkelmann had said NZ Guardian Trust Company and Perpetual Trust could not be liable and in August the Court of Appeal said it agreed with her decision.
A brief Supreme Court judgment released yesterday says the question at issue is whether the High Court was correct to uphold the striking out of Mr Hotchin’s third party claims.
Hanover and United Finance froze $554 million of funds for its 17,000 investors in July 2008. The following year Hanover helped engineer a debt for equity swap with Allied Farmers but investors suffered horrendous losses.
Their plight gained one of the highest profiles of all the finance company failures and Mr Hotchin, in particular, became a whipping boy for his lavish lifestyle.
That included building a $30 million mansion in Auckland and hosting a birthday party at the exclusive Vomo Island Resort in Fiji when investors were voting on a moratorium on their funds.
RAW DATA: Judgment (PDF)