Fortex payout within weeks

By RICHARD BRADDELL

The affairs of meat company Fortex, which collapsed in 1994, are close to resolution with payout of a settlement from auditor Price-Waterhouse likely within weeks.

Distribution of the multimillion-dollar settlement agreed a year ago has been held up pending resolution of a dispute over entitlement between first and second-ranked creditors.

Although first-ranked bondholders had prior entitlement, they agreed to a payout to second-ranked creditors to avoid a costly and time-consuming court battle, said Fortex's trustee, Tower Trust.

After the distribution, first-ranked creditors will have recovered most of the $98 million that was outstanding when Fortex collapsed, but second-ranked stockholders will be substantially short on their $39 million.

The first-ranked bondholders were mostly New Zealand banks, savings institutions and the Government Superannuation Fund.

Foreign banks providing short-term seasonal funding made up the bulk of the second rankers.

The Fortex collapse resulted in the jailing of its chief executive and company secretary.