Feltex liquidators settle with former directors

Thursday 12th May 2011 1 Comment

The liquidators of Feltex Carpets have reached a settlement with the company's former directors - the terms of which are confidential - ahead of a trial that was due to start next week.

There is no admission of liability by the directors as part of the settlement.

Liquidator McDonald Vague said it was a modest and pragmatic settlement reached on a costs saving basis.

Feltex went into receivership in 2006 and then into liquidation, leaving 8000 shareholders who had invested in its public float two years earlier holding worthless shares.

The liquidators were appointed in December 2006 and they issued proceedings against directors Peter Hunter, Peter Thomas, Tim Saunders, Michael Feeney and John Hagen in 2009.

The claims included that the directors failed to act in good faith and in the best interests of Feltex, reckless trading and failure to comply with continuous disclosure requirements of the Securities Markets Act. They were distinct from claims taken by shareholders relating to the company's initial public share sale. The Companies Office also laid criminal charges under the Financial Reporting Act against the directors.

In 2010, the District Court found that the directors had conducted themselves at all times with unimpeachable integrity.

The liquidators said that this finding caused them to reevaluate their claim, which was due to be heard in a trial starting next week in the Auckland High Court.

NZPA

Comments from our readers

On 13 May 2011 at 9:46 am G Bennett said:

So, where does that money grab go? When do shareholders get any money? When will some judicial member realise these people are not honest men?