Complex Liquidation Litigation - CBL Insurance Limited
CBL Insurance Ltd (In Liq) v Harris [2021] NZHC 1393; Livingstone v CBL Corporation Ltd (IN LIQ) [2022] NZHC 1734
Outcome: Murray acted for the liquidators of CBL Insurance Ltd (CBLI) pursuing claims against its former directors, auditors, and actuary. All matters have been settled by confidential agreements which have resulted in substantial recoveries for the liquidator.
Case Summary
CBLI was a licensed insurer operating worldwide. Its parent company was listed on the NZX. It was placed in interim liquidation and then liquidation by the High Court on the application of the Reserve Bank of New Zealand. At that time, its liquidators, Kare Johnstone and Andrew Grenfell considered that its liabilities exceeded its assets by over $300 million. Murray acted for the liquidators seeking to recover some of those losses. He drafted and issued proceedings against CBLI’s directors and its former actuary, and pursued those claims through the High Court. A successful resolution was reached on all claims and a large recovery was made for the benefit of creditors of CBLI.
LEGAL CHANGES
The factual background to matters was complex with issues arising from the interface between the Companies Act 1993 and the Insurance (Prudential Supervision) Act 2010. In addition to the civil claims pursued by the liquidators, claims were also pursued by the liquidators of the CBLI’s parent company and two class actions on behalf of shareholders in that company. There were charges laid by the Serious Fraud Office and the Financial Markets Authority.
Strategic Approach
While the company had significant directors and officers liability insurance which would likely respond to the liquidator’s claims , the total value of all the claims far exceeded the maximum available coverage. It was necessary to pursue the proceedings and achieve a settlement which gave the creditors of CBL the maximum value that they could obtain from those policies.
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Related Cases
Murray has also acted and appeared as senior counsel in a huge number of liquidation cases and is one of the most experienced lawyer in New Zealand in the area:
GIIbson v Platt [2024] NZHC 351 - Murray acted for the liquidation committee of Ruapehu Alpine Lifts.
ANZ National Bank Limited v Shehean [2013] I NZLR 614 - Murray acted for ANZ in successfully resisting attempts by a liquidator to examine employees of ANZ. This is the leading case on examinations by liquidators.
Related Publications
https://www.nzherald.co.nz/business/what-next-in-mega-cbl-legal-pile-on/4C45KQBFRTRTMBMYQLN5W3Z4TA/