Tasman Pacific creditors get that jet lag feel

By DANIEL RIORDAN

Creditors of Tasman Pacific (which traded as Qantas NZ) can expect a greater payout from the failed airline, but are still a long way from answers on the directors' role in the company's demise.

After an often testy creditors' meeting, at which directors answered questions only through their spokesman Rob Campbell, creditors came away frustrated and little the wiser.

Liquidator Jeff Meltzer said it would be months before his investigation could reveal the extent of the directors' role in the airline's demise and the extent of their responsibility. He could not rule out continuing into next year.

Mr Campbell, a former director of the airline and the chief executive of Tappenden Holdings, the investment vehicle of Alan Gibbs and Trevor Farmer which has a major stake in Tasman Pacific's sole shareholder Zazu, did shed some light on the decision to buy Tasman Pacific.

He said that the consortium's advisers, Simpson Grierson and KPMG, did not advise it to buy last year, although Zazu was confident its turnaround plans for the airline were viable.

Mr Campbell said the business had not been insolvent in March - inviting a cry of "More like December" from one creditor - and directors had believed they could turn the business around by concluding a deal with Australia's Qantas Airways right up to the time it went into receivership on April 21.

Tasman Pacific chief executive Kevin Doddrell was the only director to speak, when he responded to a plea from former employee Michelle Penn to explain why management had encouraged staff to "work our butts off" in the weeks before the receivership but had done little to change the company's operations.

Mr Doddrell said management had worked hard to develop a business plan they thought would make the company viable.

He and the other directors present - David Skeggs, Fred Watson and David Belcher - declined to comment after the meeting.

The fifth director, Ian Farrant, did not attend. Former chairman Ken Cowley, who was in London on News Corp business, sent his apologies.

About 100 people attended the Auckland meeting, which was simulcast to creditors in Christchurch.

Receiver Michael Stiassny said asset sales had realised more money than expected, and between $9.5 million and $11 million should now be available to unsecured creditors - about 7-11 cents in the dollar. Previously, he had indicated less than $3 million might be available.

Mr Stiassny was confident of selling the airline's one freehold asset, its hangar at Christchurch Airport.

He was also negotiating with Qantas Airways over the undertakings it had given to cover certain costs in the two weeks before the receivership, and hoped to resolve all outstanding issues within the next few weeks.

Some 442 trade and aircraft leasing creditors had claims of close to $92 million on August 10, up from $82 million at June 8 from the liquidators' first report, and the liquidators expect that figure to rise.

Some 816 employees had claims for $26 million. In addition, Zazu has a claim of $15.8 million.

Creditors who told of selling their houses to pay their employees, and standing in dole queues, asked directors if they knew what that felt like.

Shareholders Association chairman Bruce Sheppard, representing creditor inflight magazine publisher Waiata Publishing, warned directors they would have "moral debts" hanging over their heads whatever the outcome of the liquidators' investigation.

The liquidators - Mr Meltzer and Arron Heath of Meltzer Mason Heath - were easily confirmed in their positions.

Of the 329 votes cast, 254 (67 per cent) were in favour of their retention, representing $68.8 million (87 per cent) of the $78.4 million voted by value.

A liquidation committee to work with the liquidators was established.

It comprises Martin Angel (Pratt & Whitney), Neil Carr (Mobil Oil), Terry Hay (Pacific Flight Catering), Susan Jackman (First Direct Taxis), Andrew Jones (Qantas Airways), Richard McCabe (Airline Pilots' Association), Mike Sang (Airways Corp), Ashvin Sood (a former employee representing himself) and Tony Wilton (Engineers Union). The committee is expected to meet in about four weeks.

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