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Former National Government justice minister Sir Douglas Graham has resigned from the board of failed Lombard Finance and Investments and its parent company Lombard Group.
Lombard Finance was placed in receivership last week owing debenture and subordinated note investors $127 million.
Two other Lombard Finance directors, former Labour Government justice minister Bill Jeffries and Lawrence Bryant, also resigned.
"Under a receivership their powers to manage the company are suspended, there's no need for them to be there because all the decisions the board would make are made by us," said receiver John Fisk of PricewaterhouseCoopers.
The trio stepped down as Fisk confirmed Lombard Finance was owed about $15 million to entities associated with failed property investment company Blue Chip and $42 million by the developer of the Brooklyn Rise subdivision in Wellington.
The Brooklyn Rise debt accounts for almost 30 per cent of Lombard Finance's entire $143 loan book and was the worst example of concentrated lending by the company, which saw 80 per cent of its book owed to just five parties.
Fisk indicated recoveries on Lombard's loan book would likely be hampered by the complexity of most transactions and the softening property market.
He and colleague John Waller would employ property consultants to provide advice on how best to realise the company's assets in the difficult market conditions. Lombard Group shares rose 4c to 15c yesterday.