UK-based Harbour Litigation Funding has agreed to disclose general terms of its funding agreement with litigants suing directors of Feltex in a class action suit, the Court of Appeal heard today.
Senior counsel for the class action group, Austin Forbes, told the court on the second day of the two-day hearing in Wellington that general terms of the agreement will be shared with the defendants.
The directors and other defendants to the class suit including broking firms Credit Suisse, First NZ Capital, and Forsyth Barr, had sought reassurance there would be enough to cover the defendants' costs if the class suit wasn't successful.
Forbes said he had received instruction that he was also likely to be able to disclose terms of the insurance cover obtained by the plaintiffs. "In both cases I have gained instruction that evidence to support the funders' ability to meet its obligation under its agreement with JAFL (Joint Action Funding Ltd)" has been authorized, he said.
Some 3,000 Feltex shareholders taking a class action against the failed carpet maker's directors Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter David and Joan Withers in the lead-up to its failure.
Feltex collapsed in 2006, owing creditors between $30 million and $40 million, and destroying some $254 million in shareholder value.