The former franchisee of Hard Rock Cafe in New Zeland, Richard Bethune, has been found to have breached his directors’ duties in a judgment from Justice Peter Woodhouse.
The decision is a win for the liquidators of his company FAF in respect of its obligations regarding directors’ duties and IRD commitments.
The Judge found against Bethune with an order to pay $500,000 in compensation.
The rights to the Hard Rock Cafes in Auckland and Christchurch involving two Christchurch bars that
were bought out of receivership.
The liquidators, Deloittes, sought High Court remedies for alleged breach of directors’ duties when related party loans were made, depriving FAF of funds. They alleged that Bethune had placed personal interests ahead of the other companies, which lead to the tax shortfall.
Bethune alleged that his accountant had not kept him abreast of tax issues. He also said that he lost his agreement with the franchisor when he failed to get approval from the head lessor at Viaduct Quay in Auckland.