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Receivers update investors on failed fin coys over holiday period

In the lead-up to the holiday period, receivers PricewaterhouseCoopers and Deloitte gave investors updates on the state of a handful of failed finance companies - though not all of them gave cause for Christmas cheer.

Thursday, January 7th 2010, 5:08AM

by Paul McBeth

Some 6,000 debenture holders in Dominion Finance Group, who were owed about $224 million when the company was sent to receivers in September 2008, were expected to receive two cents in the dollar before Christmas, according to a November investors report by receiver Ron Pardington of Deloitte. He told investors he hopes to make the next distribution around April, and reiterated his expectation that investors will receive between 10 and 25 cents.

Investors in Capital + Merchant Business Investments received nine cents in the dollar, though receiver Colin McCloy of PwC did not expect any more distribution to be made. CMBI is a subsidiary of Capital + Merchant Group, whose Capital + Merchant Finance was put into liquidation on December 15, according to the Companies Office website.

PwC's McCloy delivered bad news to investors in OPI Pacific Finance, formerly MFS Pacific Finance, in his first report in November, saying "it is likely there will be significant shortfall from recovery from the loan book" and that he was unable to estimate a return for secured debenture holders still owed $198.4 million. He doubted unsecured creditors would receive any of their $57.5 million.

Lombard Finance & Investments investors received 6.5 cents in the dollar payment, even though the receiver had been forced to sell underlying property assets as mortgagee or had appointed receivers to manage the sell down process due to the volatile property market. PwC's John Fisk said the market was too uncertain to review their estimated return of between 17% and 29% of the principal investment until the next report in February, after marketing campaigns had run their course through December and January.

Secured debenture holders in Five Star Consumer Finance could receive another 2.5 cents in the dollar taking their total possible repayment to 25 cents, according to McCloy's December letter to investors, though this is dependent on the civil proceedings against the company's directors and an alleged de facto director which have been deferred by criminal charges being laid by government agencies.

Investors in National Finance 2000, whose loan book was snapped by Allan Hawkins' Cynotech Holdings, received their final update after receiving their last payment in October. Secured debenture holders were repaid 49.1% of their principal.

McCloy told investors in Nathans Finance, the VTL subsidiary, that they would receive a payment of 1.5 cents in the dollar, though they would be unlikely to receive more than 10% of their principal. McCloy said the receivers were continuing to investigate the affairs of Nathans and VTL.

Paul is a staff writer for Good Returns based in Wellington.

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