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

 

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news