Benchmark payout aired for failed flier

By Deborah Hill Cone

Friday 4th June 2004

An announcement is expected soon on the wash-up of failed airline Tasman Pacific, which traded as Qantas New Zealand, with sources saying the terms of the settlement will set a new benchmark as New Zealand's largest-ever payout by directors.

Three-year-long confidential negotiations between the airline's directors and liquidators Jeff Meltzer and Arron Heath are believed to be close to resolution which means the public might finally find out what has been going on behind the scenes.

"Things are definitely happening there's a definite move towards closure," a source involved in the negotiations said, predicting an announcement within weeks.

In March, directors of failed company DML Resources settled for $7 million days before a case against them by liquidators McDonald Vague was set to go to be heard in the High Court believed at the time to be the country's biggest settlement.

But there have been no proceedings filed against Tasman Pacific's directors, who were (at the time of liquidation) David Belcher, Rob Campbell, Kevin Doddrell, Trevor Farmer, David Skeggs and Fred Watson.

The directors prefer the secret talks to be described as "helping the liquidators with their work" rather than negotiating a settlement, pointing out with no court proceedings pending "there's nothing to settle."

But the crucial issue remains at what date exactly the company was deemed to be insolvent, and whether the directors traded past that time.

A source said a group of such savvy directors, including insolvency expert Watson who was involved in the Equiticorp case, would not have laid themselves open to this possibility.

"You can't think everyone blindly traded on with that sort of horsepower as one of their number. They're not going to get into that position, not with the reputations which are at stake here," the source said.

Key figures in the talks include commercial lawyer Brian Keane, who has acted for all the directors except Tappenden Holdings' Campbell and Farmer, as well as representatives of the insurers who underwrote the group's D&O (director and officer) policies.

Details of the liquidation are few and far between as Meltzer and Heath have taken advantage of an option not to file the usual six-monthly liquidator's reports.

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