Family, friends on National Finance receiver's list

National Finance 2000's receiver is "vigorously pursuing" the family, friends and family trust of the company's managing director, Alan Ludlow, in a bid to maximise payouts to 2000 investors left $25.5 million out of pocket by its collapse.

Colin McCloy, of PricewaterhouseCoopers, yesterday released a report on the receivership which detailed the shortfall in the finance company's loan book that led him to refer the matter to "various authorities for investigation".

It also showed "dealers' advances" totalling $5.1 million listed among the company's assets.

The advances were essentially loans to car dealers selling the imported used Japanese vehicles on which National Finance lent money. The majority were to associated Payless Cars companies which are also all in receivership or liquidation. Auckland-based car dealership Payless Cars was owned by Ludlow.

However, McCloy said a number of the loans were to other parties associated with Ludlow, including friends and relatives. Still more were to companies that had either been struck off the Companies Register or were in liquidation.

"It is clear that based on the age of loans, documentation and the borrowing parties, recoveries will be at a substantial discount to book value."

Nevertheless, McCloy said PricewaterhouseCoopers would "vigorously pursue recovery of the dealer advances with a view to maximising returns to investors".

That would be through "a range of mechanisms" including negotiations, enforcement of securities or statutory demands "where you apply to liquidate a company through the courts", McCloy said.

Despite the sale of 148 vehicles held by Payless Cars at the time of its receivership, and the pending sale of another 100, total recoveries were likely to fall short of the $3.2 million book value of advances from National Finance 2000.

Another 170 vehicles were subject to a claim from a third party.

"We were unable to reach agreement as to the claim and the matter has been referred to the courts." Although McCloy would not confirm who the third party was, it is believed to be importer Nichibo NZ.

McCloy also said he was seeking to sell off three properties owned by the Cabtal Family Trust which is associated with Ludlow.

The properties were two of National Finance 2000's commercial premises and a residential property. They did not include the $1.2 million house on Takarunga Rd, Devonport, which Ludlow part-owns.

PricewaterhouseCoopers' report contains unaudited financial statements as at May 9 prepared by Ludlow and other management which valued the company's book of $27 million in loans at $20.1 million. McCloy's analysis shows it is worth far less.

Only $7.7 million or 28 per cent of payments were current with no arrears.