Receivers tighten noose around Hubbard's Southbury Group
Allan Hubbard's investment vehicle Southbury Group has been sent to the receivers in a bid to secure control of South Canterbury Finance by seizing the parent’s documents.
Thursday, November 4th 2010, 6:29PM
by BusinessDesk
SCF's receivers Kerry Downey and William Black of McGrathNicol added the Southbury group of companies to the list of Hubbard-related entities under its control in a bid to secure access to the firms' records and ensure better management of the group. The receivers have taken possession of the Southbury's assets and undertakings that, through SCF funding, hold a wide range of investments.
"It's a critical step to protect value and ensure we get the best possible outcome for the crown," Downey said in a statement. "It will also help in ongoing investigations into SCF's finances." Last week, Downey and Black released their first report on the state of SCF, though omitted a recovery estimate.
The report showed the lender faced a $315 million shortfall in its balance sheet after almost doubling its charge for impaired loans to $446 million as at August 31.
Last month, Treasury deputy chief executive Gab Mahklouf told Parliament's Finance and Expenditure Committee the government's net liability for SCF was between $300 million and $400 million after fees.
The receivers expect $6.5 million owed to employees and the Inland Revenue as preferential creditors will be paid in full, but couldn't assess whether anything will be left for unsecured creditors, preference shareholders and ordinary shareholders. Deutsche Bank and Goldman Sachs to oversee the sales of the financier's lending business and investments in Helicopters NZ and Scales Corp respectively.
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