Receivers coy on future payments to Five Star investors
Five Star Consumer Finance’s receiver is still coy as to whether investors will get another 2.5 cents out of the failed finance company.
Tuesday, 11 May 2010
by Paul McBeth
Richard Agnew and Colin McCloy of PricewaterhouseCoopers say, in their latest update, that they have kept their forecast recovery at between 22.5% and 25%.
It is "difficult to quantify both the quantum and timing of any further distributions to secured debenture investors as they are dependent on the outcome of the legal action and actions we are currently taking to recover certain commercial loans."
Investors have been paid 22.5 cents in the dollar, mainly from the sales of the company's vineyard and consumer loan books early in the receivership for a combined $7.6 million.
Agnew and McCloy again cited the difficulty in recovering the 72 commercial loans worth some $41 million, and they have only clawed back $3.2 million from this segment of the loan book, as at Feb. 28.
The receivers said unsecured creditors will not recover any funds from the receiverships.
The Ministry of Economic Development has laid criminal charges against the directors and an alleged de facto director for breaching the Securities Act, which will be heard in October. That's put off the civil proceedings until March 2012, the receivers said.
When the firm was put into receivership, some 2,130 investors were owed about $54.4 million.
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