KEY POINTS:
Putting the Blue Chip group into Government-ordered statutory management will not recover badly needed money, creditors of the failed property investment scheme heard yesterday.
Hundreds of creditors of 20 Blue Chip-related companies in liquidation turned out at the Ellerslie Convention Centre to hear liquidator Jeff Meltzer tell them
what chance they had of getting any money back.
Initial estimates are that the companies owe over $71 million, but Meltzer said that was far from a final figure.
Creditors' meetings for the companies were held in two sessions. At the morning session creditors voted to allow media coverage, but in the afternoon journalists were asked to leave.
Creditors - many of them retired people who now have huge mortgages over investment properties that were supposed to provide them with an income stream - heard intense debate about whether the Government should step in and take control of the total 53 Blue Chip-related companies.
But Meltzer asked for time. He said statutory management at this stage would harm any chance he had of recovering funds for investors.
He hoped to be able to tell creditors in the next two to three weeks whether they were entitled to a pool of funds the liquidator was aiming to collect.
He said he would rather have companies go into liquidation in a controlled way, and would make an announcement about further liquidations in the group by next week.
"I'm not going to use a sledgehammer. I'm not going to bring down a whole host of companies if I don't believe it's in your interests short term," he told the morning meeting.
"If you come in with statutory management today it's not going to get dollars for you in the next three months."
But barrister Paul Dale, who is representing some investors, argued that the lack of progress so far in unravelling the complex web of Blue Chip companies and inter-company transactions was "completely unsatisfactory".
He said if the liquidator did not want to use a sledgehammer, "fine, let's use a scalpel, let's get in there".
Meltzer said Commerce Minister Lianne Dalziel was not in favour of statutory management at this stage.
He said following a meeting with her last week he had secured Government support in the form of funding help for the liquidators' investigations into Blue Chip.
A spokeswoman from Dalziel's office said the Blue Chip liquidators had applied to a special fund administered by the Official Assignee, available to assist with liquidations that have a high degree of public interest.
The spokeswoman said that as far as she was aware the application was still under consideration.
Meltzer said there had been talk about whether those associated with Blue Chip were guilty of any kind of fraud. He said so far the Serious Fraud Office had nothing to go on. "We need actual evidence before we can act. We need to track the money."
Many burnt investors addressed the meeting and asked questions of the liquidator.
One pensioner said he had spent his working life building up his retirement savings, and was now near to ruin. "I can't believe how we got sucked in."