Ten-year case against Feltex goes to the Supreme Court

Feltex director Peter Thomas and chairman Tim Saunders arriving at the Auckland District Court in 2010. Photo / File

The battle between Feltex and former shareholders, which has raged for over 10 years, will be heard in the Supreme Court in July.

The Supreme Court today granted leave for the appeal case led by Eric Houghton representing Feltex shareholders left out-of-pocket after the carpet manufacturer folded in 2006.

When the company collapsed, roughly 8000 investors lost a total of $200 million.

Last month, the Supreme Court allowed a hearing for the appeal granting the counsel for the applicant 30 minutes for oral submissions.

"Without this, the case is a dead duck," Tony Gavigan, director of Joint Action Funding Limited, said at the time. "The long fight would be over."

Gavigan's wish was granted today and the Supreme Court will now hear the appeal.

Instructing solicitor Roger Cann said there was a possibility the case could end up back in the High Court to be retrialed.

"The Supreme Court could do one of two things," Cann said. "It could overturn the High Court judgment or it could order a complete rehearing."

In 2014, the Wellington High Court's Justice Robert Dobson cleared the former Feltex directors of misleading investors in its prospectus, but did note there were some criticisms to be made of the offer documents.

Houghton lodged an appeal with the Court of Appeal which was dismissed in October of last year.

Within a year of NZX listing, Feltex stock was virtually worthless, thanks to a series of warnings that the company would miss its forecasts. Receivers were appointed in September 2006. Houghton had sued the former Feltex directors, owners and sale managers in a representative action on behalf of 3639 former shareholders seeking $185m in what he said was a misleading 2004 prospectus.

Rival Australian carpet maker Godfrey Hirst ended up buying the assets.

The action alleges that the company's prospectus in 2004, the year it floated, contained information that was misleading or wrong, or omitted to make information available that would have affected investment decisions.