Receivers unsure how much govt will claw back from Rockforte Finance
The receivers for Rockforte Finance are unsure how much they will be able to claw back for investors due to the failed minnow finance company’s practice of refinancing non-performing loans.
Tuesday, August 3rd 2010, 10:09PM
Receiver Dennis Parsons of Indepth Forensic said at the time of receivership, Rockforte had 318 loans, mainly secured over second-hand Japanese imported cars, worth some $4.8 million. Of that $1.1 million was classified overdue.
"The review of the loan book has indicated that this overdue figure may be materially inaccurate as the company regularly refinanced non-performing loans into new loan, creating a new and current liability and by doing so had the effect of removing the non-performing loans from its records," Parsons said in his first report. "In some instances this refinancing took place immediately prior to the receivership."
Parsons said he has received expressions of interest to buy the loan book.
Rockforte was sent to the receiver in May owing some 77 investors about $3.25 million after it failed to bring on board an institutional investor to prop up its balance sheet. Unsecured creditors are owed $274,000 and the IRD is a preferential creditor owed some $68,000.
Rockforte is one of six finance companies that have called on the government's retail deposit guarantee, for a total of some $79.1 million. The government expects to pay out $934 million under the guarantee, according to its financial statements for the 11 months ended May, including a $47 million liability for the cost of payments to investors in guaranteed entities.
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