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Investors in collapsed finance company Five Star Finance have been given some good news from receivers - they are about to get a little bit more of their money back.
Receivers PricewaterhouseCoopers have written to the aggrieved investors, saying they now expect to make a payout of five cents in the dollar later this month. It follows on from a 17.5 cents in the dollar payout made in April.
Five Star Finance went into receivership last September with a loan book of $65.5 million. Investors were told in March that secured debenture holders could expect to get 20 per cent to 25 per cent of their money back.
This new payment takes the total payout to 22.5 per cent, but the receivers say any further payouts will be dependent on future legal action.
"However, it is difficult to quantify both the quantum and timing of any further distributions to secured debenture investors as they are dependent on the outcome of the legal action and actions we are currently taking to recover certain commercial loans."
The directors of Five Star Finance are due to front up in the Auckland District Court on Monday, facing criminal charges laid by the Companies Office.
Charges have been laid against Marcus MacDonald, Anthony Bowden and Nicholas Kirk.
The Herald understands there will be an additional defendant, Five Star executive Neal Williams, who was not an actual director but is regarded as a de facto director for his role as principal officer or promoter of Five Star's offer under the Securities Act.
The charges relate to securities being offered and allotted to members of the public without there being a registered prospectus, investment statement or trustee appointed.
If convicted, the trio could face a maximum fine of up to $300,000.
The Five Star group of companies is also the subject of separate investigations by the Securities Commission and the Serious Fraud Office.
Five Star Debenture Nominee went into liquidation on November 5, owing 2300 secured debenture investors $54.4 million. In December it was revealed that receivers found many of the company's large commercial loans were either improperly secured or completely unsecured.
There is also a civil case underway, with the company taking action against the directors for claims they breached duties owed to the company.
- HERALD ONLINE
