The receivers get paid, but after that there's nothing left for the investors.
That's the sad state of affairs at property financier Capital + Merchant.
Grant Thornton, one of the receivers for the failed finance company, has revised their forecast payout for debenture investors from 14-59 cents in
the dollar to "nil dollars".
Grant Thornton say they uncovered extensive unreported related party loans and the property development collapse wiped out any remaining value once fees were extracted.
This means around 7,000 retail investors have completely lost the $167 million they invested with Capital + Merchant, which was run by Owen Tallentire, who is now being invested by various authorities.
Capital + Merchant borrowed over $20 million from vulture fund Fortress Credit in October 2006, granting Fortress prior charge over the assets ahead of debenture investors.
Grant Thornton, which is acting for Fortress, said in a report dated January 30 Fortress has been repaid $20.6 million and was due a further $2.6 million, which it would be repaid in full.
Grant Thornton has been paid $1.2 million in fees, while legal fees were $0.4 million.
Korda Mentha is also a receiver for Capital + Merchant and is acting for Perpetual Trust, which was the trustee for the investments of the 7,000 retail investors.
- INTEREST.CO.NZ
