KEY POINTS:
Bridgecorp's receivers have started court action to recover hundreds of thousands of dollars from the group's directors which include founder Rod Petricevic.
The receivers also said the property market downturn had hit likely payouts to investors, who were now expected to get back as little as 16c of
every $1 they put in, which would bring total losses to $390 million.
In a letter sent to investors yesterday, receivers John Waller and Colin McCloy of Pricewaterhouse Coopers said deteriorating market conditions had, as feared, affected the recovery of loans and realisation of the company's assets.
That had forced them to cut their estimate of likely recoveries for debenture investors to 16 to 51 per cent, down from the 19 to 63 per cent previously advised.
A number of the company's loans related to properties which were sold during the March quarter, realising "significantly less than earlier estimates due to the weaker property market".
The softer market had also seen sales contracts on other properties cancelled.
There were also problems with most of properties on which Bridgecorp held second mortgages where the sale or refinancing process was out of the receivers' hands.
"Given current market conditions we believe it prudent to reduce our estimate of recoveries in respect of those loans," said Waller and McCloy.
They also referred to the political environment in Fiji which, on top of the difficult property and credit markets, was hampering efforts to recover money lent on the Momi Resort development there.
Should recoveries on that project prove fruitless, the likely payout to debenture investors would likely be within a 16 to 27 per cent range.
In their letter, Waller and McCloy said they had initiated recovery action against a number of Bridgecorp directors "in relation to amounts paid to them in the period prior to receivership".
McCloy confirmed he had commenced a civil action against one of the directors of Bridgecorp Management Services Ltd and was considering actions against other directors in respect of advances, salaries and bonuses paid to them.
The directors are Rod Petricevic, Bruce Davidson, Rob Roest and Gary Urwin.
The receivers are also continuing their investigations into a number of areas including:
* The company's conduct in respect of investors, funds received from them and maturing investments and associated dealings with third parties.
* The company's conduct in the period leading up to the appointment of receivers.
* Its financial reporting practices.
* Its compliance with its trust deed and applicable legislation including the Securities and Companies Acts.
Waller and McCloy said the resolution of various issues around Bridgecorp, which was placed in receivership in July last year owing 14,500 investors almost $460 million, could take at least a further year.
PAYBACK TIME
* Bridgecorp's receivers have cut likely payments to investors to a 16 to 51 per cent range, down from 19 to 63 per cent previously advised
* Should recoveries from the troubled Momi Resort development in Fiji fall through the most investors could hope for is 27c.
* The receivers have now launched court action to recover advances, salaries and bonuses paid to Bridgecorp's directors before the company failed in July last year.