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

 

Statistics: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news