Ex-Feltex directors lose appeal
BY MARTA STEEMAN
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The Court of Appeal has dismissed an appeal by the embattled former directors of failed carpet maker Feltex against a collective lawsuit.
The former directors had appealed against a High Court judgment that South Island investor Eric Houghton was entitled to sue them in a representative capacity for other shareholders in Feltex.
The appeal against that representative order has been dismissed by the Appeal Court in a judgment released yesterday.
However, the appeal court has allowed the directors' appeal against the High Court's refusal to strike out the cause of action which alleges breach of fiduciary duty. So that action is struck out.
Feltex raised just over $250 million from investors in 2004 through offering shares in the company at $1.70 a share.
By March 2006 the shares had sunk to 60c a share.
The company was placed in liquidation on December 13, 2006 with the shares worth nothing and up to $40m owed to creditors.
- © Fairfax NZ News
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