KEY POINTS:
At the time of Nathans' collapse VTL owed it $112 million and parties associated with VTL's business activities owed it a further $59 million.
The receivers of Nathans Finance are set to take legal action against associated parties of the failed finance company, adding to the mounting legal
activity surrounding the firm's directors.
In a letter to investors, sent out on Christmas Eve, PricewaterhouseCoopers receiver Colin McCloy said he had identified potential claims and would begin action shortly.
McCloy also said he had begun legal proceedings against trusts associated with certain directors of Nathans Finance and its parent VTL to do with related party lending, and had notified the US Securities and Exchange Commission about "matters of concern" relating to the company's dealings in America.
The legal action by PWC follows the laying of criminal charges against the directors last week by the Securities Commission. A day later, the Serious Fraud Office announced that it would be investigating the company after receiving information from PWC.
Nathans Finance went into receivership in August last year owing $174 million to 7000 investors.
It is a subsidiary of vending machine technology company VTL Group, which went into receivership last month.
At the time of Nathans' collapse VTL owed it $112 million, and parties associated with VTL's business activities owed it a further $59 million.
McCloy said yesterday that PWC was working closely with the Securities Commission but the receivers' action would be separate from that which the commission was taking.
He would not give details of the cases for fear of prejudicing them and also would not reveal what the matters of concern were that had been reported to the US authorities.
McCloy told investors he was still working through the sale of a number of assets owned by VTL but predicted that even after assets were realised they could get back less than 10c in the dollar. Investors have been waiting for months to receive even a cent out of the receivership.
PWC said it hoped to make its first payout of up to 2.5c in the dollar to investors today.
Court action is the only other likely method of trying to get further money out of the failed company.
The Securities Commission case is expected to go to the Auckland District Court on January 23.
Its charges are against Nathans directors John Hotchin - the brother of Hanover Finance director Mark Hotchin - Donald Young and Kenneth Moses, as well as a fourth director believed to be living in Australia.
Civil proceedings are also being taken under the Securities Act and involve declarations of the directors' liability.
The Securities Commission alleges the Nathans Finance directors signed untrue statements saying the company had no bad debts, had adequate liquidity, that its lending was diversified, and that it made loans in accordance with robust policies.
It says they misled investors over Nathans' lending to VTL.
The criminal charges they face carry maximum penalties of five years in jail or a fine of up to $300,000. Under the civil action they may face paying up to $500,000 each in compensation.
The Serious Fraud Office said its investigation was likely to take some time given the complexities associated with it.
ACTION MOUNTS
* Serious Fraud Office is investigating Nathans.
* Securities Commission has laid criminal charges against its directors.
* Receivers PricewaterhouseCoopers is taking other multiple legal actions.
* US Securities and Exchange Commission notified about "matters of concern".
* Investors due to be paid up to 2.5c in dollar today.
