KEY POINTS:
Money Managers is doing everything it can to get the money owed to First Step investors back in the process of winding up the trusts, says Phil Epps, a representative for Doug Somers-Edgar.
First Step's trustee, Calibre Asset Services, this week wrote to its more than 7000 investors who have money with the six trusts advising them $38 million has been set aside as a provision for unrealised assets and is unlikely to be returned.
Money Managers told investors the trusts would be closed in October last year, at which point there was $457 million invested across them.
Since then it has paid back $186.5 million and is planning to make another payment in February of $25 million.
But an audit by Grant Samuel of First Steps' annual reports has also revealed $108 million is under "fundamental uncertainty". Much of this rests with two companies to which the trusts loaned large sums of money.
The first, Club Finance, loaned money to the public for used cars and is in the process of being wound down. It owes $63 million to the trusts.
The second company, the Waipouwerawera Trust, owes $73 million for the development of a geothermal plant by the Geotherm Group. It went into receivership in December last year.
Phil Epps, CEO of the EFT Group, which represents the interests of Somers-Edgar, said $16 million of the $38 million alone could be attributed to Club Finance.
Restructuring specialists KordaMentha were appointed to investigate Club Finance in August.
Epps said he had been advised by KordaMentha to "look at all legal options" for getting the money out of the company and to refer a number of matters to regulatory bodies.
Epps said he had done this and was waiting to hear back from those regulatory bodies before taking further steps.
Club Finance is owned by F and I Holdings which is in turn 50 per cent owned by Somers-Edgar and 50 per cent owned by Goldleaf Investments.
One of Goldleaf's shareholders is former Club Finance managing director Philip Markwick.
Markwick said the wind-down of the company could take several years as many of the consumer finance loans had four-year terms. The company stopped lending in February. Markwick said the company had to be wound down because the First Step funds closed and it was the only source of lending for company.
