Investors' case to be tested in two-day Feltex hearing

Feltex director Peter Thomas and chairman Tim Saunders. Photo / Dean Purcell

Feltex investors will have to wait a fortnight to find out whether their allegations against the carpetmaker's former management and directors will hold up in court.

A two-day hearing has been set down for December 2-3 to discuss whether there is a case to answer. The defendants' application for costs and the possible striking out of certain parts of the plaintiffs' amended statement of claim will also be con-sidered.

The investors, numbering about 1900, are represented by Eric Houghton, who is listed as the main plaintiff in the proceedings.

The plaintiffs' lawyer, Austin Forbes, QC, said if the class action got the green light next month further hearings on the evidence to back up the allegations would be discussed.

The investors say the Feltex prospectus in 2004, the same year it floated, contained information that was misleading or wrong, or omitted to make information available that would have affected a person's decision to invest in the company.

The defendants include former chairman Tim Saunders, former chief executive Sam Magill and former directors John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers.

Former director John Hagen is not involved in the proceedings.

The defendants have denied the allegations.

Also targeted in the action is Credit Suisse First Boston Asian Merchant Partners, which offered Feltex for sale, Credit Suisse Private Equity and joint lead float managers, First New Zealand Capital and Forsyth Barr.

Forbes said the defendants had not disclosed how much they would seek in security for costs from the plaintiffs.

He said part of the plaintiffs' claim fell outside of a limitation period of five years for civil cases that dates from the time a company went into receivership (September 2006).

The proceedings are taking place in the High Court at Christchurch.

Feltex collapsed in 2006 owing about 8000 investors millions.