KEY POINTS:
Club Finance, a used-car loan company associated with Doug Somers-Edgar is to be wound down, its trustee has told investors.
In a letter Edward Russell of Calibre Asset Services said he had been advised by Matrix Funding that Club Finance had been "unable to secure funding lines and as a consequence is to be wound down and to repay its loans to the trust".
Matrix Funding is one of the trusts which oversees investments for finance advice firm Money Managers.
It is understood that loans to Club Finance make up about 14 per cent of the total assets of four investment vehicles called the First Step Trusts.
Club Finance has a loan book of approximately $66 million and owes $63 million to First Step Trusts.
Club Finance is half owned by Somers-Edgar through F&I Investments, the other half held by Goldleaf Investments whose shareholders include Club's former managing director Philip Markwick.
"Matrix has recommended an independent specialist be appointed to carry out this role and we are supportive of this recommendation," said Russell in the letter.
Russell said a full report on the wind down would be sent to investors, probably before the end of the year.
The First Step funds are themselves in the process of being wound down, with about $400 million left to return to investors.
Club Finance hit the headlines earlier this year when it was ordered to repay $788,000 to unemployed borrowers in an out-of-court settlement.
It is understood Club Finance ceased lending to the public earlier this year.
