Lombard Finance receiver still in settlement talks with ex-directors

Tuesday 2nd July 2013

The receiver for Lombard Finance & Investments is still in talks with the directors of the failed lender and has started negotiations with a third party it sees facing a claim as it looks to claw back what it can for investors.

PwC's John Fisk is talking to Lombard's former directors, who were today sentenced to home detention by the Court of Appeal, as they work through "complex factual and legal issues," he said in his latest report. If the discussions don't come to a satisfactory conclusion, Fisk said he expects to take the claim to the High Court, which he has ensured has not been time-barred.

Separately, the receiver has determined there's a claim against a third party, and is in "without prejudice" talks with that party. Again, if a deal can't be reached, Fisk said it will likely be pursued in the High Court.

"The claims may have a material effect on the assets of LF&I available for distribution to secured debenture holders," Fisk said in his report. "We remain of the view that progressing the discussions with the directors and the third party with a view to reaching a determination as quickly as possible is in the best interests of secured debenture holders."

The 4,400 Lombard Finance investors owed $127 million at the time of the receivership have been repaid 13 cents in the dollar, and are looking at an estimated recovery of between 15 percent and 20 percent.

The receiver is still working to wind up the remaining property assets of Lombard Finance, which include one section in a completed residential subdivision, a bare land development, and a completed coastal subdivision.

BusinessDesk.co.nz

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