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Creditors miss out on $4m

By Mike Ross

Friday 28th July 2000

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Max Resources statutory managers expect to recover about $2.2 million from sales of company assets, leaving a substantial deficit in the face of creditor claims totalling $6 million.

Legal action against Max Resources directors is still under consideration, according to a report issued this week to Max Resources investors by statutory managers, PricewaterhouseCoopers partners John Waller and Richard Agnew.

A Securities Commission investigation released earlier this year criticised Max Resources directors for failing to properly carry out their duties and for making misleading public statements about Max Resources' profitability.

An Australian Securities and Investment Commission (ASIC) investigation is still under way.

Acting as directors during the period under investigation were Australian-based directors Jeff Verheggen, his father Josephus Verheggen, Michael Langoulant and Peter Briggs with New Zealand-based directors Owen McShane and Tom Johnson.

In 1997, Max Resources switched company operations from mineral exploration in Australia to organic fertiliser - purchasing assets in the US, Indonesia and France with development funding for ventures in Sri Lanka and India.

The last full set of financial statements issued by Max Resources directors was in October 1997, disclosing net assets of $12.7 million.

The statutory managers netted about $1.3 million from the sale of organic fertiliser assets.

When trading in Max Resources shares was suspended by the Stock Exchange in 1998, nearly 500 of the company's 625 shareholders were New Zealand residents.

The PricewaterhouseCoopers report identifies any return for shareholders will depend on successful legal action against Max Resources directors and the company auditor.

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