Capital + Merchant closer to payment
By Jonathan Underhill
The receivers for Capital + Merchant are closer to making a distribution of some $10 million after settling some claims with first-ranking creditor Fortress Credit Corp and former trustee Perpetual Trust.
The finance company failed in 2007 leaving 7500 debenture holders $167 million out of pocket.
In the 16th receivers' report, from KordaMentha's Grant Graham and Brendon Gibson, they say they have settled a claim from Fortress for $113,000 compared to about $3.8M Fortress had claimed, and made a $539,000 settlement payment to Perpetual against its claim of $614,000.
A separate contingent claim from Perpetual "cannot be resolved at this time," they said.
The drawn-out wind-up of Capital + Merchant is unusual for the degree of squabbling between stakeholders.
KordaMentha's Graham and Gibson are the second set of receivers, while Perpetual was replaced by Public Trust as trustee last year.
The liquidator successfully sued the failed finance company's auditor, BDO Spicers, while the current receivers are in a separate legal dispute with Perpetual and the company's solicitors, set for a hearing in September.
Meantime, debenture holders have received nothing.
The receivers got $10.3M of funds from the $18.5M settlement between Capital + Merchant's liquidator and the company's audit firm BDO Spicers.
Capital + Merchant was placed into liquidation under the control of the Official Assignee in December 2009.
"Since receiving the money from the liquidator, we have been working to pay a distribution to investors", the receivers say.
"This has involved having to restore an electronic copy of the investor database from December 2007. We have made good progress in this regard and expect to be in a position to write to all debenture holders within the next month, seeking confirmation of the accuracy of the company's records of their investment details."
Once confirmed, the receivers expect to pay a distribution, with the amount dependent on confirmation of claims, they said.
Former Capital + Merchant directors Wayne Douglas and Neal Nicholls, and chief executive Owen Tallentire were jailed for fraud in 2012 for what the Court of Appeal later called "theft on a grand scale".