Bridgecorp receiver still eyeing third party claims
By Paul McBeth
March 27 (BusinessDesk) - The receivers for Bridgecorp are still actively pursuing potential claims against third parties, having cut an $18.9 million deal with the directors and insurer of the failed lender.
PwC’s Colin McCloy is working with legal counsel to chase third parties in the lead-up to the 2007 collapse of Bridgecorp, although he wasn’t able to give an update on how long the investigations will take, according to his latest report on the receivership.
“We continue to actively pursue a number of potential claims against third parties in respect of their conduct prior to the receivership,” McCloy’s report said. “These claims involve complex legal issues and we are unable to accurately predict a timeframe for their resolution.”
Earlier this month the receiver settled a civil claim with the former Bridgecorp directors, boosting the payout to debenture holders by 4 cents, which is expected to be paid in April.
Investors have so far been repaid 8 cents in the dollar, or $36.6 million, and once the remaining issues in the receivership are settled investors are expected to get a “modest distribution,” McCloy said. He had previously advised investors were likely to get less than 10 cents in the dollar.
The deal came after the Supreme Court last year 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 to cover their defence ahead of repaying investors, freeing up some $20 million to be claimed.
When Bridgecorp collapsed in 2007 it owed some 14,400 investors about $459 million. Since the collapse, the receivers have achieved total realisations of $89.8 million as at Jan. 1 of the $595.3 million book value ascribed to Bridgecorp in June 2007, including intercompany loans.
The Momi Resort development in Fiji created a big hole for the receivers, with no realisations achieved from the $106.6 million advances.
Bridgecorp’s 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.