De-listed in May 2017, Wynyard Group shareholders look to share in a small surplus after the High Court ruled in favour of a $171 million claim against insolvent subsidiary Wynyard (NZ) Ltd.
After developing a worldwide customer base for its risk management and financial intelligence software, Wynyard stopped trading in late 2016. Subsidiary Wynyard (NZ) Ltd was Wynyard’s operating arm. It was funded on an ‘as needed’ basis by its holding company Wynyard Group. By the time both companies were in liquidation, Wynyard (NZ) had chewed through $171 million. The High Court was asked whether these advances were loan advances or an injection of equity. Wynyard (NZ) liquidators are holding about $851,000 for distribution to unsecured creditors. Including Wynyard Group’s $171 million claim as debt would see a payout of just under half a cent in the dollar for unsecured creditors; compared with twelve cents in the dollar if Wynyard Group’s funding was ruled to be equity.
The High Court was told the legal status of cash transfers from Wynyard to Wynyard (NZ) was never documented. Within the group, transfers were assumed to be cash advances eventually to be capitalised as equity. They were recorded as loans in group financial statements. No board resolutions were ever passed converting the debt to equity.
Associate judge Bell ruled the $171 million is an unsecured loan. Liquidators estimate the payout from Wynyard (NZ) will see Wynyard Group in surplus with shareholders sharing in about $363,400.
Jackson v. Wynyard Group Ltd – High Court (31.05.18)
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