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Hotchin drops Perpetual in appeal case

26 Mar 2015

Mark Hotchin, principal of failed finance company Hanover, has abandoned his appeal against Perpetual Trust to include them in the Financial Markets Authority's civil case against the former lender's directors and promoters.

In mid-2013, the High Court in Auckland's Justice Helen Winkelmann agreed with New Zealand Guardian Trust Co and Perpetual Trust to strike out a claim by principal Mark Hotchin that would have drawn the trustees into the FMA's civil case. Appearing in the Supreme Court before Chief Justice Sian Elias, Justice William Young, Justice Terence Arnold, Justice Susan Glazebrook and Justice Mark O'Regan, Hotchin's lawyer Nathan Gedye said the case against Perpetual had been abandoned.

David Cooper QC is appearing for the Guardian Trust.

The appeal will cover whether the Court of Appeal was correct to uphold the striking out of Mr Hotchin's third party claims against the respondents.

The FMA is pursuing the former Hanover directors and promoters in a civil suit relating to the period between December 2007 and July 2008 when $35 million was deposited with the failed lender. In April, the Serious Fraud Office closed its investigation into the lender after deciding not to press ahead with a prosecution, though it will provide information and evidence to assist the FMA's claim.

Hanover Finance froze $554 million of funds for its 17,000 investors in July 2008 after running into financial difficulties, before convincing them to accept a disastrous deal where their debt was swapped for equity in Allied Farmers the following year.

The appeal continues in the Supreme Court.

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