Liquidiator mum on Five Star funding commitments

Ongoing litigation has Five Star Finance's liquidator is keeping mum on the amount of funds on hand in the trust account and where it is committed.

Thursday, 2 September 2010

by Paul McBeth

Gerry Rea Partners said it will not disclose the funds on hand after it managed to claw back $261,000 in the six months through June 16. It also managed to win $505,000 plus interest from director Neil Williams' wife Jeanne, though the judgement is being appealed, and the liquidator said it will probably take action regarding cheques signed by Williams in excess of $500,000.

The principal assets still be realised are Five Star's accounts receivable, and the liquidator expects further recoveries from a number of debtors, including Richmond Park Properties, which is owned by directors Nicholas Kirk, Anthony Bowden and Marcus Macdonald.

Five Star's four former directors face more than 100 charges from the Serious Fraud Office, carrying a maximum penalty of seven years' jail apiece. The prosecution relates to loans worth some $50 million, most of which the SFO says is not recoverable.

Five Star Finance and Five Star Consumer Finance called in the receivers in 2007 owing some $77 million to secured debenture holders. The SFO estimates the losses to investors and creditors of the Five Star Group to exceed $85 million.

The former directors already face charges from the Companies Office over alleged breaches of securities law, while Five Star Consumer Finance's receiver has lodged a civil suit against the board for failing its duty to the company.

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