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ANZ left NZ$15.6 million short on Feltex receivership; Nothing for shareholders, staff or trade creditors

ANZ left NZ$15.6 million short on Feltex receivership; Nothing for shareholders, staff or trade creditors

The ANZ, which pulled the plug on Feltex in September 2006 after running out of patience with the carpet maker's management and appointing McGrathNicol receiver, is likely to lose NZ$15.6 million as a result of the receivership.

That's according to liquidator McDonald Vague's ninth report.

ANZ was owed A$119.5 million, plus accruing interest and charges, at the time of receivership. A total of A$49.2 million was recovered for the bank in New Zealand and A$67.4 million in Australia in the period to September 21 last year. Since then, McDonald Vague says, ANZ has been repaid a further A$350,000 which is likely to be the last money it gets from funds held by McGrathNicol.

"We have calculated based on information provided by the Bank that it will be owed after all realisations NZ$15.6 million," McDonald Vague says.

"We do not expect there to be any surplus funds from the conclusion of the receivership for the liquidation."

At the date its report was prepared McDonald Vague said claims from 614 unsecured creditors, including NZ$5.72 million worth from trade creditors and NZ$8.2 million worth from employees, had been received. On top of that, 166 Feltex shareholders lodged claims - as unsecured creditors - worth NZ$6.3 million.

Most of the shareholder claims came from investors who bought shares at NZ$1.70 each in Feltex's NZ$254 million June 2004 initial public offering. By the time the company was tipped into receivership the share price had collapsed to just 3 cents each.

In May McDonald Vague settled a claim, potentially for tens of millions of dollars, against five former Feltex directors just days before a High Court trial was due to begin. The liquidator said the terms of the settlement were confidential and the settlement was reached without any admission of liability by the directors. It described the settlement as a "modest and pragmatic" one reached on a costs saving basis. Also see opinion piece: Why the Feltex debacle must never happen again.

The five directors McDonald Vague had targeted were former chairman Tim Saunders, ex-CEO Peter Thomas, and ex-directors Peter Hunter, Michael Feeney, and John Hagen.

McDonald Vague says it had to secure "significant" private funding for the litigation against the directors because ANZ was not prepared to cough up. The liquidator says it had provided 11 briefs of evidence including one of its own, one from an expert, one from an ANZ representative, one from a Godfrey Hirst director, one from a receiver, three from creditors, three from shareholders, and one from Feltex's share registry manager.

Australian rival Godfrey Hirst bought Feltex out of receivership on October 20, 2006.

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