Feltex directors face fresh $41m lawsuit

Directors of failed carpet company Feltex are facing a fresh lawsuit for up to $41 million in damages by the company's liquidators.

The directors are already facing criminal charges and a civil suit brought by a shareholders group for their role in the collapse of the NZX-listed carpet maker in 2006.

The claims were yesterday issued in the Auckland High Court against five directors - Peter Hunter, ex-chief executive Peter Thomas, former chairman Tim Saunders, Michael Feeney and John Hagen.

Liquidators John Whittfield and Peri Finnigan said they had been watching the other developments concerning Feltex with interest.

"The directors are certainly facing issues on all fronts, but frankly they should not be surprised.

After all they presided over a substantial and spectacular collapse and a lot of people lost money. Several of the unpaid creditors of Feltex are no longer in business," said Whittfield.

The liquidators are claiming a failure to act in good faith and best interest of Feltex when they let Craig Turner (a second potential buyer) carry out due diligence having just signed a deal with Godfrey Hirst.

They claim directors failed to ensure that Feltex complied with the continuous disclosure requirements of the Securities Markets Act.

They claim reckless trading from August 1, 2005 until receivership and for incurring liabilities they could not have had reasonable grounds to believe would be met. The liquidators said that the directors had shown no interest in resolving the claims.

A shareholders group has already filed a claim in the High Court for up to $254 million - the amount invested in the 2004 float of Feltex. The liquidators noted that yesterday's claims were distinct from claims by shareholders relating to the float.

The directors are also to appear in the District Court next week over allegations that Feltex's half-year accounts to December 2005 did not disclose the publicly listed company was in breach of a loan agreement with ANZ bank.