RESEND: Bridgecorp receiver cuts $18.9 mln settlement with directors, insurer
(Fixes expected payment date in 2nd graph)
March 12 (BusinessDesk) - The receiver for Bridgecorp has reached a deal with the former directors and insurer of the failed lender, which will boost the payout to investors by 4 cents in the dollar.
PwC’s Colin McCloy reached an $18.9 million settlement over a civil claim against the directors that they had breached their duties under the Companies Act, he said in a statement. The deal will let the receiver pay an interim distribution of 4 cents in the dollar, which is expected to be made in April, taking total recoveries to 12 cents in the dollar.
The Financial Markets Authority signed off on the deal, dropping its own civil proceedings against the Bridgecorp directors, saying it was the best outcome for investors in the failed lender.
“It is pleasing to be in a position to make a distribution considerably sooner than would have otherwise been the case,” McCloy said.
Once the receivership is completed, McCloy said there will likely be a modest distribution paid to investors. In his September update, McCloy told investors they would likely receive less than 10 cents in the dollar.
Last year, the Supreme Court set aside a Court of Appeal decision to let former Bridgecorp directors Peter Steigrad, Bruce Davidson and Gary Urwin use their directors and officers liability (D&O) policy cover their defence ahead of repaying investors, freeing up some $20 million of cover to be claimed.
Bridgecorp collapsed in 2007, owing some 14,500 investors about $459 million. Its former managing director Rod Petricevic and chief financial officer Rob Roest received lengthy jail terms for misleading investors and making false statements, with an extra time added over charges brought by the Series Fraud Office. Steigrad and Davidson received home detention and Urwin was sentenced to two years’ jail.