Clegg & Co Finance final receivers report confirms investors got back 58.7 cents in the dollar
By Jonathan Underhill
Dec. 29 (BusinessDesk) - Investors in Clegg & Co Finance and related entities, whose former director Brian Clegg was sentenced to home detention in 2009, got back 58.7 cents in the dollar, according to the failed group's final receivers report.
Clegg & Co Finance, the holding company of Clegg & Co Leasing and Clegg & Co Capital, was put into receivership in October 2007 by Covenant Trustee Co after breaching rules on related party lending and net assets.
Brian Clegg was sentenced to 12 months home detention in December 2009 after he admitted securities and companies law breaches related to $2 million of lending to the ultimate holding company, Clegg & Co, which he owned. According to reports at the time, there was no documentation for the loans but the company signed off on prospectuses saying it was in compliance with its trust deed on related party lending.
The final receivers report from BDO, for the period October 2007 to Dec. 22 this year, said total distributions of about $8.9 million, or 58.7 cents in the dollar, were made to 496 investors in the group, leaving a shortfall of $6.2 million. The receivers had initially hoped to return between 70 cents and 85 cents. Unsecured creditors weren't paid.
The first receivers report back in 2007 said related party loans to Clegg & Co stood at about $3.1 million, "partially secured by a first mortgage over Brian Clegg and Pamela Nicholson-Clegg's residential property at Algies Bay, north of Auckland, which was subsequently sold. That report said a deficit of $2.5 million was deemed not to be recoverable because the principal asset of Clegg & Co was an amount due from another of their companies, Classic Finance, which was placed in liquidation in 2007 owing about $4.5 million.
Brian Mayo-Smith and Andrew Bethell of BDO were also appointed liquidators of the group and completed that task on Dec. 22.