Westpac New Zealand is suing a second former senior executive of Lane Walker Rudkin (LWR), the Christchurch based clothing company that controversially collapsed in 2009.

The bank alleges Patricia Anderson was deceitful and fraudulent and falsified invoices for fictitious products that were used to release funds under a Westpac letter of credit (L/C) facility.

LWR collapse

Westpac wants NZ$50 million (US$36 million) from Anderson for her part in the collapse of the clothing manufacturer in which hundreds of people lost their jobs.

It collapsed after Westpac appointed receivers. The bank's lending to the group grew from NZ$36 million in November 2005 to NZ$42 million in June 2006 and to NZ$130 million in April 2009. Court documents show the receivers have so far recovered about NZ$41 million.

Marriage breakdown

Anderson's former husband who was LWR's chief executive when the firm collapsed, Ken Anderson, was jailed in 2013 for fraud that left Westpac Bank with NZ$70m of losses.

The new charges brought by Westpac include claims that both Andersons were 2001 signatories to the bank's lending services to the company, including a NZ$2.5 million L/C. The former couple said they were accountants, the bank alleges.

L/C abuse

The Andersons separated in 2005, a year after the company's financial difficulties started. Patricia Anderson remained a director of a related company, Florian Leathergoods, with which she is not now associated.

Westpac claims Florian made up invoices for fictitious product that were used to release funds under Westpac's L/C facility between 2005 and 2007. The money was then used as short-term funding.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.