Payment of $1m confirmed
Former Feltex shareholders suing the carpet maker's directors and advisers over its collapse have confirmed the payment of $1 million to a trust account as security for costs.
On Tuesday the High Court gave a deadline of 5pm Friday for all details of the deposit to be confirmed, after the defendants had complained it had not been paid by January 15 as previously ordered.
The cash deposit, intended to cover the defendants' legal costs if they win the case, was one of the last details to be arranged before the trial begins in March.
The defendants - former Feltex directors Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers, as well as broking firms Credit Suisse First Boston, First NZ Capital and Forsyth Barr - had sought an order for dismissal of the case unless the money was paid into the court by Thursday. Justice Robert Dobson declined the request.
Austin Forbes QC, counsel for the plaintiffs who are represented by former shareholder Eric Houghton, said the previous costs order had specified only that the money should be available for enforcement in New Zealand.
At the time of Tuesday's ruling it was already in a trust account of law firm Wilson McKay, as required.
Roger Cann, of Wilson McKay, said all elements of the order had been complied with, "especially the posting of security for costs of $1m. That was the biggie."
The money is being put up by London-based litigation funding firm Harbour Litigation Investment Fund.
Cann said the case, which is due to begin in the week of March 10, was "something of a David and Goliath story".
Until now, "no claimant like this has ever got itself organised to take on defendants of this magnitude."
The claim involving 3639 former shareholders alleges false and misleading statements were made in prospectus documents for Feltex's $250m float in 2004. Fairfax NZ