Ex-Nelson man David Teece.
A high-profile expatriate investor and rich-lister who is suing a Bahraini bank for US$62 million (NZ$79.2m) has had a US$3.4m claim against him dismissed.
United States-based David Teece, who was Nelson-raised, had filed a claim against Bahrain-based Kuwait Finance House (KFH) over the 2009 collapse of iconic clothing brand Canterbury.
He has alleged the private-equity investor induced him to pour millions into ailing Canterbury in the lead-up to its failure.
Earlier this year, Teece discontinued his claim in California before refiling in the New Zealand courts in April.
But in November, the bank claimed judgment against Teece for US$3.4m which the Bahrain Chamber for Dispute Resolution had ordered he pay following ongoing disputes between the parties.
The US$3.4m, including costs, related to capital injections into Canterbury before it collapsed.
A judgment in the High Court at Nelson yesterday, however, dismissed the claim.
Associate Judge John Matthews said in his judgment that the Bahrain Chamber was not a court and it did not therefore have power to enforce the orders it had made.
“KFH Bahrain has not established to the requisite standard for the entry of summary judgment that the Chamber is a court.
“As a result the application for summary judgment cannot succeed.”
Teece has claimed in his US$62m suit that KFH stonewalled a 2008 attempt by him to sell Canterbury to French-Israeli businessman Alexandre Gaydamak.
Gaydamak, best known as the former owner of English Premier League football club Portsmouth, is the son of controversial Israeli politician Arcadi Gaydamak.
Teece said in his Californian claim he became aware of interest in June 2008 from Gaydamak to take over Canterbury for US$75m, and pushed KFH to conclude a sale.
Gaydamak at the time had a high profile after buying the Portsmouth football club in 2006.
Portsmouth won the FA Cup in May 2008, but ran into serious financial difficulties the following year – including missing staff and player wage payments – shortly before Gaydamak sold out of the club.
Teece was made a Companion of the New Zealand Order of Merit in the 2013 honours list for services to New Zealand-US relations.
His first involvement with Canterbury came in the late 1990s when he acquired Lane Walker Rudkin from Brierley’s. In 2001 he sold LWR, but spun off Canterbury and kept a sizeable stake.
At the time of the 2009 collapse Teece was still a significant minority shareholder in Canterbury, with a 35 per cent stake.
KFH, brought in as a private-equity investor following the spinoff, is recorded as owning 45 per cent of the company’s shares. Teece’s California claim alleged KFH “was at all times majority shareholder”.
Founded in 1904, Canterbury suffered a devastating blow in 1999 when the All Blacks – who had long been garbed in its kit – signed up German giant adidas as uniform supplier.
According to receiver KPMG’s reports, Canterbury failed due to the poor performance of subsidiaries in Europe and a withdrawal of funding from KFH.
Canterbury owed $101m to creditors, including $54.4m to KFH and $3.6m to Teece, at the time of its collapse in August 2009.
According to the final report by receivers, both shareholders lost millions, with KFH receiving $26.2m and Teece just $395,000 from distributions. Unsecured creditors received virtually nothing, and receivers sold the intellectual property and brand of Canterbury to UK sports retailer JD Sports Fashion in 2009.
Fairfax NZ
– The Press
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