Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Strategic, Lombard receiver seeks settlement with directors

Strategic, Lombard receiver seeks to avoid court costs in settlement talks with directors

By Paul McBeth

Dec. 27 (BusinessDesk) - The receiver for Strategic Finance and Lombard Finance & Investments, PwC's John Fisk, is in talks to reach settlements with the directors of the two failed lenders in a bid to avoid the costs of taking legal action.

The Strategic and Lombard Finance boards have each received draft statements of claim against them by their respective receiver and both boards are in negotiations to reach an out-of-court settlement, according to Fisk's latest reports for the two companies.

Lombard Finance's directors, who are appealing a criminal conviction for signing off on a misleading prospectus, are alleged to have breached their duties under the Companies Act and have been in touch with the receiver since receiving the claim, the Dec. 21 report said.

"We are continuing to explore whether there is any opportunity to achieve a negotiated settlement without incurring the substantial cost of court proceedings," Fisk said in his report on Lombard Finance. "As proceedings are likely against some or all of the directors, we are not able to provide further specifics of those communications at this stage."

Similarly, the Strategic directors have engaged in talks on a without-prejudice basis with the receiver, according to the Dec. 21 report.

"If settlement cannot be reached, we expect that court proceedings will be issued in April 2013," Fisk said in his Strategic report.

Both lenders have been the subject of regulatory probes, with convictions for Lombard Finance's Doug Graham, Lawrence Bryant, Bill Jefferies and Michael Reeves, and an ongoing investigation by the Financial Markets Authority into Strategic's board.

PwC's Fisk has been a go-to guy for an array of insolvencies, including the sale of the Pike River Coal mine to Solid Energy, the liquidation of the South Canterbury Finance group of companies and more recently overseeing the failure of fund manager Ross Asset Management.

Both Strategic and Lombard Finance receiverships have had the top end to their forecast recovery ranges trimmed, though each excludes any potential claims made by the receiver.

Some 10,000 Strategic investors owed $367.8 million when the lender failed got a Christmas Eve distribution of 1.5 cents in the dollar, taking their return-to-date to 10 cents, and PwC's Fisk estimates they will get between 12 percent and 20 percent of their principal back.

The 4,400 Lombard Finance investors owed $127 million at the time of the receivership have been repaid 13 cents in the dollar, and are looking at an estimated recovery of between 15 percent and 20 percent.

Fisk said the priorities for both receiverships in 2013 will be to realise the remaining underlying property securing the lenders' loan books and to pursue potential claims against the directors of the firms and third parties.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Insurance: EQC To Double Payout, Scrap Contents Insurance

New Zealand’s Earthquake Commission may double its payout amount, scrap contents insurance and process claims through private insurers under the government’s long-running review of funding and management of the state-run earthquake insurer. More>>

ALSO:

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news