The
courts are becoming impatient with delays by Paul Yarrow in his attempts to lay
the ghosts of Yarrow group’s 2011 receivership.
His $90 million claim against business adviser Michael Finnigan was
struck out because of inexcusable delays.
A related claim against his parents’ estates and their charitable trust
was put on hold, likely to be struck out if court papers are not filed
promptly.
Yarrow Bakeries had
been an iconic Taranaki business for several generations until dismembered
after receivership in May 2011.
Receivership followed an acrimonious split between director Paul Yarrow
and his fellow board members and the subsequent collapse of a partial sale to
Japanese company Sumitomo.
There has been a
history of family infighting following a 2003 deed of family arrangement. Father Noel decided to cede control of the
Yarrow group to one son, John, subject to his other son Paul receiving an
equalising payment. The two brothers
then fell out. They patched up their
differences with a 2005 agreement; Paul bought out John for $45 million. Three years later, Paul was in court suing
John for $10 million alleging his brother had misrepresented the value of the
business sold. This claim was settled
out of court in 2009; all parties agreeing to enter into good faith
negotiations to restructure Yarrow’s finances.
Subsequent to the
Yarrow receivership, Paul sued business adviser Mr Finnigan for $90 million
alleging Mr Finnigan was to blame for the failure of the Yarrow group. Paul also alleged Mr Finnigan was party to
misrepresentations about Yarrow’s value at the time of his 2005 purchase. This claim was struck out by Justice Williams
as being an abuse of the court process. Over a period of six years there had
been continual and persistent delays in both filing court papers and complying
with procedural court orders.
The court was told Paul
Yarrow currently also has underway testamentary promises and family protection
claims against both estates of his parents and a claim against their
Queensland-based charitable trust. These
are actions against Mr Finnigan in his roles as either executor or trustee. Paul claims $A22 million together with $NZ20
million. In part, this mirrors the
related claim struck out against Mr Finnigan, said Justice Williams. Paul Yarrow alleges Mr Finnigan as trustee of
the Yarrow charitable trust wrested control of the Yarrow group from him by not
approving the Sumitomo deal. Paul says
the deal would have retired group debt and kept Yarrow alive as a business.
Justice Williams gave
Paul Yarrow one last chance to sort out his claim against his parent’s estates
and their charitable trust. Specific
details of his claim must be filed by early September. Paul Yarrow does not have a lawyer acting on
his behalf. He told the court he is
penniless.
Yarrow
v. Finnigan – High Court (27.07.17) and Yarrow v. Yarrow Charitable Trust -
High Court (28.07.17)
17.088