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Judge mulls creditor protections in Southbury liquidation bid

Monday 20th August 2012

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Associate Judge Hannah Sargisson reserved her decision to weigh up creditor protections in a bid to wind up the late Allan Hubbard's Southbury Group.

FCS Loans, the shell company holding the remaining assets of South Canterbury Finance, applied in the High Court in Wellington to appoint David Bridgman of PwC to liquidate ultimate parent Southbury.

Judge Sargisson was reluctant to make the order without assurances there was no conflict in the appointment. Bridgman also acts as the liquidator of FCS.

Counsel for FCS, Nigel Stone, proposed sending out the court's order with the first liquidator's report, which gives creditors the opportunity to seek a new liquidator. A similar proposition was made with the liquidation of other South Canterbury Finance-related firms, he said.

"What I will do is give some thought to that. If I am satisfied I will issue the order later this afternoon," the judge said. "If I think it doesn't go far enough to deal with any conflict issues raised by individual creditors, I will issue a minute and call for further submissions."

At the time of South Canterbury Finance's collapse two years ago, Southbury owed $84.7 million to the lender, of which $2 million has since been repaid, according to the latest receiver's report.

The Crown has taken over the lending group's wind-up, having clawed back $645 million of the $1.78 billion it paid out to guaranteed debenture holders.

In June, South Canterbury Finance still held assets worth some $350 million after receivers Kerryn Downey and William Black of McGrathNicol sold stakes in Helicopters NZ, Scales Corp, Dairy Holdings, as well as the sale of the so-called good bank and FACE Finance.

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