Monday 21st May 2018
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CBL Corp's voluntary administrators adjourned a watershed meeting today when it became clear there would be a voting stalemate on whether to put the company into liquidation or hand control back to its directors.
Auckland-based CBL appointed KordaMentha voluntary administrators in early March after the Reserve Bank sought an interim liquidation of its New Zealand supervised arm and the Central Bank of Ireland made a similar move against the insurer's European division.
Voluntary administrators Brendon Gibson and Neale Jackson of KordaMentha said in a statement to the stock exchange that while the necessary 75 percent of creditors by value would have supported the resolution to put the company into liquidation, a majority by number would not have been achieved which would have caused the liquidation resolution to fail. Related party creditors were a factor. The resolution to hand control of the company back to its directors would also have failed, they said.
In a voluntary administration, at a meeting of creditors, resolutions need 75 percent by value and 50 percent by the number of creditor votes to pass.
The decision to adjourn means that CBL Corp stays in voluntary administration. "The administrators consider this to be in the creditors’ best interests in the circumstances," they said.
Gibson and Jackson said they intend to seek directions from the court on the related party creditor votes.
The watershed meeting will now be held no later than July 2, they said.
CBL had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority, the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL’s international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.
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