Time running out for Feltex investors to join lawsuit

Photo / Hawkes Bay Today

Investors who lost money when Feltex collapsed in September 2006 have until next week to join a class action of hundreds of former shareholders.

The carpet-maker floated in May 2004, raising $254 million. But in 2005, Feltex slashed its profit forecast twice and in September 2006 the main lender, ANZ, called in the receivers.

The class action alleges that the prospectus at the time Feltex floated contained information that was misleading or wrong, or omitted to make information available that would have affected an investor's decision to invest.

The directors at the time, and listed defendants, are Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers.

Also targeted are the firm that offered Feltex for sale, Credit Suisse First Boston Asian Merchant Partners, Credit Suisse Private Equity Inc and the joint lead managers of the float, First New Zealand Capital and Forsyth Barr.

Eric Houghton, the main plaintiff, lost $20,000 and says he has yet to see a cent.

"It's a reasonable amount of money. It's not money I needed to feed my family but it's still a reasonable amount."

A statement of claim was first filed by Joint Action Funding in 2008 at the High Court at Christchurch. The company is funding the litigation on behalf of Feltex investors.

Joint Action Funding director Tony Gavigan said civil cases of this scale could cost millions and take years to reach court.

June 2 is the deadline for investors to become part of the proceedings. This is because the investors need to sign on before the sixth anniversary of when the shares were allocated, which was June 2, 2004.