by Paul McBeth
Finnigan told Good Returns he has reduced the time he is devoting to Strategic to cut back on his cost to the business while the board undergoes the management review process as part of its moratorium agreement. Under the terms of the moratorium, the chief executive position would be reviewed on its first anniversary.
"I've broadly reduced by time commitment to the firm over the last couple of months," Finnigan said. "I've been doing a bit of consulting and advice work to supplement myself" through this period, he said.
The hardest part was juggling his cost to Strategic against ensuring the company gets the best return on loans, he said. Finnigan's salary in the 12 months through June 2009 was $550,000.
Strategic sparked off a review event by its trustee under the terms of its moratorium when it failed to make its first payment to investors on Jan. 7. While the finance company managed to pay down the $25 million priority debt facility to the Bank of Scotland, it did not manage to raise enough money to pay stockholders.
The finance company has at least 14 days to negotiate with its trustee, though Perpetual Trust Wellington regional manager Stephanie McGreevy agreed with Strategic's directors that it would probably take a bit longer than two weeks. The official negotiation period started on Jan. 5, though McGreevy said they were discussing the possibility of Strategic missing the payment around Christmas.
Finnigan said one of the problems they had faced in meeting the payment was the deadline itself, which had given borrowers an incentive to use the payment date as leverage in an attempt to bargain down their debt - something Strategic refused to move on.
Strategic will continue to attempt to realise its assets during the negotiation period, and McGreevy said an announcement will probably be forthcoming in a couple of weeks.
Paul is a staff writer for Good Returns based in Wellington.
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