No certainty on recoveries for OPI debenture holders

Estimating how much OPI Pacific Finance's secured debenture holders, owed nearly $200 million, are likely to recover is "extremely difficult," receivers say.

Thursday, 17 November 2011

by Jenny Ruth

That's because of the complexity of the receivership, the various claims they are pursing and their investigations, receivers Colin McCloy and Maurice Noone say in their latest report.

"Providing an estimated return to secured debenture holders may also jeopardise any actions currently being exercised by the receivers," they say.

In the latest six months ended September 14, the receivers collected A$1 million (NZ$1.3 million) to settle a claim against a valuer.

The 7,361 New Zealand debenture holders are owed $143.4 million and the 2,514 Australian debenture holders a further $55 million.

So far, they have received just one distribution of 1.67 cents in the dollar in December last year.

OPI Pacific also owed 994 holders of unsecured notes $57.5 million at the time of receivership.

The receivers say first-ranking mortgages have taken control of all the properties on which OPI Pacific had lent money and that many borrowers are in some form or insolvency or have been deregistered.

"We are disappointed to advise that it is unlikely (OPI Pacific) will recover any material funds from properties to be sold, given the losses the first ranking mortgagees are likely to incur."

The receivers say they have served notices of demand on guarantors and borrowers and are taking legal action on a case by case basis but since many are in some form of insolvency or have been declared bankrupt "there are unlikely to be material recoveries."

They are also investigating potential claims against valuers and the various insurance policies the company held.

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