Equitable investors facing a shortfall: receivers
Equitable Mortgages' investors not covered by the government guarantee and the government are unlikely to by paid all they're owed and unsecured creditors owed about $25 million are unlikely to receive anything.
Thursday, August 18th 2011, 10:47AM
by Jenny Ruth
Receivers Grant Graham and Brendon Gibson of KordaMentha says in their second statutory report Equitable had $188.4 million in loans outstanding when it went into receivership on November 29 last year.
"It will not be possible to recover the full amount outstanding but the receivers are yet to confirm what portion can be collected," they say.
Equitable had about 6,000 depositors with $192.3 million invested in debt securities and about $178 million was covered by the guarantee.
Treasury spokesman Angus Barclay says 88.6%, or about $158 million, of the latter has been repaid to investors. The remaining investors need to contact Treasury and make a claim, Barclay says.
After the date of the report, which showed the receivers were holding $37.4 million in cash at June 18, they repaid $35 million to investors and the government.
The receivers say they haven't yet received a claim from the Inland Revenue Department which is likely to increase the level of unsecured claims.
"Based on our preliminary estimates, we believe it is extremely unlikely there will be a return to unsecured creditors and we expect there to be a shortfall owing to investors and the Crown," the receivers say.
Their report shows they received $32.5 million in cash on appointment and collections since, including $6.2 million in loan repayments and $1.7 million in interest payments, took total receipts to $41 million at June 18.
Cash outflows to June 18, including $0.7 million in payments to the receivers and $1.4 million in loan advances, totalled $3.6 million to June 18.
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