The Star: September 20, 2018

8 Thursday September 20 2018
Latest Christchurch news at www.star.kiwi
The Star
News
Stonewood directors face reckless trading
More details have
emerged over the
High Court action
involving the collapse
of Christchurch-based
Stonewood Homes.
Daisy Hudson reports
QUEENSTOWN Mayor
Jim Boult and the founder
of Stonewood Homes Brent
Mettrick are facing claims to
pay more than $28 million over
the collapse of the construction
company, amid allegations of
reckless trading.
Both Mr Boult, who was a director
of the company, Mr Mettrick
who was managing director,
deny the claims. Mr Boult said he
acted in “good faith” as a director.
Stonewood went into receivership
on February 22, 2016, owing unsecured
creditors $15 million.
It was later placed into liquidation.
About 110 home buyers
were affected by the collapse.
High Court documents show
Mr Boult, who was Christchurch
Airport’s chief executive for five
years until he left in late 2013,
and Mr Mettrick are accused of
three counts of breaching their
duties as directors.
It is claimed the pair allowed
companies to continue trading
while insolvent, and Mr Boult
“actively dissuaded” Mr Mettrick
from accepting another buy-out
offer, while making offers himself
at the same time.
The $28,369,000 civil suit was
lodged in the High Court by
liquidators Rhys Cain and Rees
Logan.
They are also claiming
$267,592.20 from Mr Boult, alleging
his director remuneration
was unauthorised and unfair. Mr
Mettrick is being sought for an
additional $1,814,273.
The claim relates to Stonewood
Homes Ltd, Stonewood Homes
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New Zealand Ltd and Holmfirth
Group Ltd. The liquidators allege
the group of companies traded
from February 2014 while facing
financial difficulties.
These include insufficient
working capital, extended build
times, warranty and remedial
issues and franchisees failing to
pay franchise fees and causing
reputational damage.
The claim states “from approximately
December 1, 2014,
and certainly by March 31, 2015,”
continued trading was likely to
cause “substantial risk” to creditors,
but the directors allowed it
to continue.
In his defence Mr Boult denies
the allegations, denies the companies
were insolvent for several
months as claimed and said he
did not make an offer to buy the
company.
He determined it was “reasonable”
for them to continue
to trade given funding and/or
investment opportunities were
“being actively explored” which
would “alleviate the group’s
financial challenges.”
Four parties were considering
investment in 2015 – Philip
Carter, Guoxin, INNO and
Warwick Isaacs/Mr Boult, the
claim reads.
Mr Boult admits he initially
expressed “scepticism” about the
likelihood of Guoxin investing.
Neither Guoxin nor Mr Carter
Jim Boult
made an offer.
He said what the claim described
as a “final offer” from
INNO was not in fact an offer,
and was “not capable of acceptance
as alleged.”
Mr Mettrick said the INNO
proposals were not conditional
offers. Mr Boult also denies making
an offer to Mr Mettrick with
Mr Isaacs, who was appointed
chief executive of the group on
March 31, 2015.
He said he was involved
in submitting several “heads
of agreement” (non-binding
documents setting out key
terms) in January 2016 which
proposed a purchase by Denali
Management Ltd or its nominee.
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