Bridgecorp Holdings

Bridgecorp Holdings Ltd was a high-risk property-development and finance group active in New Zealand and Australia. Its corporate history began under the name Bridgevale Mining, which was listed on the New Zealand stock exchange before changing its name in 1987 and acquiring Toy Warehouse. The toy-retailing business was later sold in 1992 after being regarded as underperforming. Bridgecorp was delisted around that period and subsequently entered receivership, after which Rod Petricevic effectively took control of the group and attempted several times to regain a listing on the New Zealand Exchange. Those efforts were unsuccessful. In 2002, Bridgecorp Holdings was deregistered in New Zealand and moved its headquarters to Sydney. The group retained a New Zealand operating subsidiary, Bridgecorp Limited, and established Bridgecorp Finance Ltd as its Australian arm. From 2004, Bridgecorp Holdings traded through Unlisted, a New Zealand-based facility for companies outside the main exchange. In 2006, the group reported the results of Bridgecorp Limited to Unlisted even though the securities being traded were those of Bridgecorp Holdings. This structure and the group's fundraising activities later became significant issues in regulatory and criminal proceedings. Bridgecorp raised money from investors in both Australia and New Zealand, attracting more than 18,000 investors over approximately three years. Its investment products promised annual returns generally in the range of 9 to 11 percent. The Australian Securities and Investments Commission prohibited Bridgecorp Finance from raising further money from existing investors in August 2006. ASIC had previously warned of solvency concerns in December 2005. These events occurred during a wider period of stress and failure among New Zealand finance companies. The group collapsed in July 2007 and most Bridgecorp companies were placed into receivership. At the time of the collapse, the group was reported to owe approximately A$467 million to about 14,500 investors. Graham Miller of Covenant Trustee Company was appointed trustee, while PricewaterhouseCoopers later acted as receiver in related recovery and litigation work. The collapse transformed Bridgecorp from a property and investment business into a major corporate-failure and investor-protection case. Former directors and senior officers were charged over statements made in investment prospectuses. Gary Urwin and Bruce Davidson pleaded guilty earlier in the proceedings, while Rod Petricevic, Rob Roest and Peter Steigrad were found guilty in April 2012. The resulting prison and home-detention sentences, followed by a major civil claim alleging breaches of directors' duties, made Bridgecorp one of the most prominent finance-company failures in New Zealand's 2006–2012 collapse cycle. The group is now defunct.

Bridgecorp Holdings originated as Bridgevale Mining, a company listed on New Zealand's stock exchange. In 1987 it changed its name to Bridgecorp Holdings and acquired Toy Warehouse. The retail subsidiary was considered underperforming and was sold in 1992. Bridgecorp was delisted around the same period and entered receivership, after which Rod Petricevic became the group's effective controlling figure. He made several attempts to relist the company, but the New Zealand Exchange did not approve them. The group reorganized its geographic structure in the early 2000s. In 2002 Bridgecorp Holdings was deregistered in New Zealand and shifted its headquarters to Sydney, Australia. Bridgecorp Limited continued to serve as the New Zealand subsidiary, while Bridgecorp Finance Ltd was created as the Australian operating arm. In 2004, Bridgecorp Holdings began trading through Unlisted, a New Zealand facility used by companies whose securities were not quoted on the principal exchange. During 2006, the group reported Bridgecorp Limited's results to the facility even though the securities traded were those of the holding company. Bridgecorp's later business model centered on property development and investment finance. It attracted more than 18,000 investors in Australia and New Zealand with promised annual returns between 9 and 11 percent. Regulatory concerns emerged before the collapse. The Australian Securities and Investments Commission had warned of solvency issues in December 2005 and in August 2006 barred Bridgecorp Finance from raising more funds from existing investors. In July 2007, Bridgecorp and most related companies entered receivership. Contemporary accounts put the group's liabilities at approximately A$467 million owed to roughly 14,500 investors. Graham Miller of Covenant Trustee Company was appointed trustee. The collapse became part of the broader New Zealand finance-company failure cycle of the mid-to-late 2000s and raised questions about disclosure, corporate governance, investor protection and the use of unlisted trading arrangements. Criminal proceedings followed. Petricevic, Davidson, Roest, Urwin and Steigrad were charged in connection with the collapse and the contents of investment prospectuses. Davidson and Urwin pleaded guilty, while Petricevic, Roest and Steigrad were convicted in April 2012 of making untrue statements. Urwin received a two-year prison sentence. Petricevic and Roest each received six-and-a-half-year prison terms. Steigrad received nine months' home detention, 200 hours of community service and an order to pay $350,000 in reparation. In October 2012, receiver PwC brought a civil action in the High Court at Auckland seeking approximately $442 million from former directors for alleged breaches of directors' duties. The action was described as one of New Zealand's largest civil claims. Bridgecorp Holdings has no current operating business and is treated as defunct following the 2007 receivership.

• 2012

  Criminal convictions and sentencing

  [1]Bridgecorp Holdingsen.wikipedia.org

  Former officers were convicted or pleaded guilty in proceedings concerning untrue investment-prospectus statements, followed by prison and home-detention sentences.

• 2012

  PwC files civil recovery action

  [1]Bridgecorp Holdingsen.wikipedia.org

  The receiver filed an approximately $442 million claim against former directors for alleged breaches of directors' duties.

• 2007

  Group collapses into receivership

  [1]Bridgecorp Holdingsen.wikipedia.org

  Bridgecorp collapsed with approximately A$467 million reportedly owed to about 14,500 investors.

• 2006

  ASIC restricts Bridgecorp Finance fundraising

  [1]Bridgecorp Holdingsen.wikipedia.org

  ASIC barred Bridgecorp Finance from raising money from existing investors after earlier solvency warnings.

• 2004

  Trading begins through Unlisted

  [1]Bridgecorp Holdingsen.wikipedia.org

  Bridgecorp Holdings began trading through the Unlisted New Zealand trading facility.

• 2002

  Headquarters move to Sydney

  [1]Bridgecorp Holdingsen.wikipedia.org

  Bridgecorp Holdings was deregistered in New Zealand and moved its headquarters to Sydney, while maintaining New Zealand and Australian subsidiaries.

• 1992

  Toy Warehouse is sold and Bridgecorp is delisted

  [1]Bridgecorp Holdingsen.wikipedia.org

  The underperforming toy company was sold, and Bridgecorp was subsequently delisted and entered receivership.

• 1987

  Bridgevale Mining changes its name and acquires Toy Warehouse

  [1]Bridgecorp Holdingsen.wikipedia.org

  The listed company changed its name to Bridgecorp Holdings and acquired Toy Warehouse.

Bridgecorp positioned itself as a property-development and finance group offering investors comparatively high fixed returns. Its later public identity was closely associated with wholesale and retail investment fundraising rather than with a consumer product brand.

• Investment products

  Bridgecorp investment securities

  Bridgecorp raised funds from investors in New Zealand and Australia through securities associated with its finance and property activities. The products were marketed with promised annual returns generally between 9 and 11 percent. Their later prominence came from the group's inability to meet obligations after its 2007 collapse and from legal proceedings concerning statements made in prospectuses.

• Property and corporate finance

  Property-development finance

  Bridgecorp operated as a property-development and finance group, using investor funds in connection with property and related corporate financing activities. The available reference material does not identify individual developments or project brands, but describes property development as the central business context for the group.

• Retail subsidiary · 1987

  Toy Warehouse

  Toy Warehouse was a retail business acquired by the company in 1987, when the parent was renamed Bridgecorp Holdings. It was later regarded as underperforming and sold in 1992. The divestment marked the end of the group's known connection with this retail operation.

• 2012

  Untrue statements in investment prospectuses

  Several former officers were prosecuted over statements made in Bridgecorp investment prospectuses. Petricevic, Roest and Steigrad were convicted, while Urwin and Davidson had previously pleaded guilty.

  Source

• 2012

  Civil claim alleging breaches of directors' duties

  PwC, acting in the receivership, filed a High Court claim seeking approximately $442 million from former directors for alleged breaches of directors' duties.

  Source

• 2007

  Bridgecorp receivership and investor losses

  Bridgecorp collapsed into receivership in July 2007, reportedly owing approximately A$467 million to around 14,500 investors. The failure became a major case in New Zealand's finance-company collapse period.

  Source

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• 2007

  Entry into receivershipOther

  Background

  The group could no longer meet its obligations to investors and counterparties.

  Action taken

  Bridgecorp and most related companies were placed into receivership, with Covenant Trustee Company appointing Graham Miller as trustee.

  Aftermath

  The collapse exposed approximately 14,500 investors to reported liabilities of about A$467 million and led to criminal and civil proceedings.

  Reported investor liabilities. A$467 million owed (At the 2007 collapse)

  Source

• 2006

  Regulatory fundraising restrictionOther

  Background

  ASIC had raised solvency concerns about the group and reviewed Bridgecorp Finance's fundraising activities.

  Action taken

  ASIC prohibited Bridgecorp Finance from raising further money from existing investors.

  Aftermath

  The restriction preceded the group's collapse into receivership in 2007.

  Source

• 2004

  Use of the Unlisted trading facilityStrategy

  Background

  After delisting and unsuccessful relisting attempts, Bridgecorp required an alternative venue for trading its securities.

  Action taken

  Bridgecorp Holdings began trading through Unlisted in New Zealand.

  Aftermath

  The group's reporting of subsidiary results and the identity of the traded parent later became issues in scrutiny of its structure.

  Source

• 2002

  Corporate relocation and restructuringStrategy

  Background

  Bridgecorp sought to operate across New Zealand and Australia after unsuccessful attempts to regain a New Zealand Exchange listing.

  Action taken

  The holding company was deregistered in New Zealand and moved its headquarters to Sydney, with separate New Zealand and Australian subsidiaries.

  Aftermath

  The group continued its cross-border property and finance activities but remained outside the main New Zealand exchange.

  Source

• 1987

  Diversification into toy retailingStrategy

  Background

  The company was operating as Bridgevale Mining and sought a new corporate direction through the acquisition of Toy Warehouse.

  Action taken

  It changed its name to Bridgecorp Holdings and acquired Toy Warehouse.

  Aftermath

  The toy business was later judged underperforming and sold in 1992.

  Source

1. 1Bridgecorp Holdingsen.wikipedia.org