Monday 4th November 2019
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Aggrieved Feltex investors have sought a last-minute delay to the second part of a decade-long claim scheduled to start in the High Court at Wellington this morning.
Eric Houghton's $185 million claim on behalf of more than 3,000 Feltex Carpets shareholders is now at the valuation or quantum stage after the Supreme Court ruled last year the carpet-maker's 2004 prospectus had an untrue statement and that could lead to liability under the Securities Act.
Feltex collapsed less than two years after going public, and the investor claim against directors and promoters was launched in 2008.
More than a decade later, in a hearing starting this week, Justice Robert Dobson is supposed to hear arguments and evidence on how much the investors say they have lost.
However, according to the investor side’s opening submissions dated Oct. 31, it has sought adjournment.
The investor claimants say they need more time to appeal a Court of Appeal decision which ruled out some expert evidence that the investor claimants want to use.
Tony Gavigan, who is funding the litigation through Joint Action Funding, told BusinessDesk earlier this year that the evidence is needed for the claimants to obtain insurance for the next stage of the trial.
The submissions for this morning’s hearing also say the evidence is “important and substantially helpful” to the investors in making the claims for their loss.
“Currently the stage two case is not ready for trial and the plaintiff does not have the resources supporting him or the claimants to safely commit to trial,” the submissions signed by the investors’ barrister Colin Carruthers QC say.
“The plaintiff, therefore, considers that the application for adjournment should be granted in the interests of justice and interests of access to justice by 3,639 (mainly small investor) claimants.”
The lawyers for the defendants - which include former Feltex directors Timothy Saunders, Samual Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers, as well as two Credit Suisse entities which acted as promoters and vendors - were not immediately available for comment.
2004- Feltex Carpet floats
2006 - Moved into receivership and liquidation
2008 - Eric Houghton files representative claim
2014 - Justice Dobson finds against claimants in High Court
2016 - Court of Appeal upholds most of High Court decision
2018 - Supreme Court reverses Court of Appeal, but First NZ Capital and Forsyth Barr removed from the case.
2019 -Stage two trial to evaluate quantum scheduled
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