Feltex receivership almost sorted
The six-year receivership of failed carpetmaker Feltex is now just a few months away from completion, receivers McGrath Nicol have said in their latest report on the company.
Feltex collapsed and went into receivership in September 2006, and the following month receivers sold the assets and business of Feltex in New Zealand, Australia and the United States to carpetmaker Godfrey Hirst.
In terms of the sale agreement, the details of which are confidential between the parties, there were two retention issues - items that the parties agreed would be resolved after the sale was completed.
One of those retention issues has since been settled.
Now receivers have said the last remaining Godfrey Hirst retention issue was likely to be determined within the next two months.
Once that issue was finalised, the receivers would make a final repayment to the General Security Agreement holders - namely Australia and New Zealand Banking Group Limited and ANZ National Bank Limited - and retire as receivers and managers, joint receiver Kerryn Downey said in his latest report.
When the Feltex group collapsed in 2006 it owed A$119.5 million to ANZ Bank.
To date the receivers of the New Zealand part of the group have repaid A$49.55 million, and the receivers of the Australian companies have repaid A$67.4 million. The balance owing is about A$2.55 million, plus interest.
The receivers said they did not expect any money to be left over from the sale of the assets of the company to pass on to the liquidators who are dealing with the claims of unsecured creditors.
Meanwhile, about 3000 former Feltex shareholders are pursuing a $150 million class action against Feltex's former directors, sellers and promoters, claiming the prospectus accompanying the Feltex share offer in 2004 was misleading and contained untrue statements.
Several thousand investors bought shares in Feltex at $1.70 each in May-June 2004, investing just more than $250 million in the carpet company but lost their investment just over two years later when it collapsed and went into receivership.
In a separate matter Feltex liquidators McDonald Vague have instituted proceedings against audit firm Ernst and Young, which prepared the December 30, 2005, half-year financial statement for Feltex, in an attempt to recover about $12 million for unsecured creditors.
Should the Christchurch City Council sell some of its assets?Related story: Council asset sales mooted to help raise $900m