Strategic Finance settlement talks end

TIM HUNTER
Last updated 15:16 05/07/2013

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Receivers for Strategic Finance have completed settlement talks with the failed company's directors over a claim for alleged breaches of the Companies Act.

In the latest receiver's report published today, John Fisk, of PWC, said there had been "robust and constructive discussion" with Strategic's directors in an effort to recover money for investors without incurring the cost of going to court.

"These negotiations are now effectively complete, subject to the resolution of certain outstanding matters on an agreed timetable," Fisk said.

The report did not say how much money was involved.

Stategic Finance collapsed in August 2008 and when receivers were appointed in March 2010 the company owed debenture investors $368 million and a further $23.5m to unsecured or subordinated investors.

Since then, receivers have repaid 10c in the dollar, or $36.8m, to debenture holders.

Investor Allan Preece, who had $100,000 tied up in Strategic, said while news of a potential settlement was better than nothing "I very doubt if it's going to be a substantial amount of money. I don't think it's going to make a hoot of difference to the outcome for investors."

Receivers did not name the directors involved in the claim, but those on the board around the time of Strategic's collapse were New Zealand-based directors Kerry Finnigan, Graham Jackson, Marc Lindale, Denis Thom and David Wolfenden, as well as Singapore-based Timothy Rich and Australia-based John Drabble.

All except Drabble face a lawsuit from the Financial Markets Authority for alleged breaches of the Securities Act. The FMA is in confidential talks with the six men to explore an out-of-court settlement.

Receivers also said today they were "investigating a separate claim against a third party with whom we are now also in 'without prejudice' discussions."

It is not clear whether the third party is an auditor or trustee or an individual.

Fisk's report said the deadline to conclude a settlement with directors had been extended while the third party talks progressed.

Finnigan, Strategic's former chief executive, said he could not comment on the settlement talks or identify the third party involved.

Total recoveries for investors are expected to be 12-20c in the dollar, not counting any amounts from legal action.

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- BusinessDay.co.nz

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