Lombard Finance and Investments directors during their sentencing at the High Court in March. Photo / Mark Mitchell
The receiver for Strategic Finance and Lombard Finance & Investments, PwC's John Fisk, is in talks to reach settlements with the directors of the two failed lenders in a bid to avoid the costs of taking legal action.
The Strategic and Lombard Finance boards have each received draft statements of
claim against them by their respective receiver and both boards are in negotiations to reach an out-of-court settlement, according to Fisk's latest reports for the two companies.
Lombard Finance's directors, who are appealing a criminal conviction for signing off on a misleading prospectus, are alleged to have breached their duties under the Companies Act and have been in touch with the receiver since receiving the claim, the December 21 report said.
"We are continuing to explore whether there is any opportunity to achieve a negotiated settlement without incurring the substantial cost of court proceedings," Fisk said in his report on Lombard Finance. Similarly, the Strategic directors have engaged in talks on a without-prejudice basis with the receiver.
Both lenders have been the subject of regulatory probes, with convictions for Lombard Finance's Doug Graham, Lawrence Bryant, Bill Jefferies and Michael Reeves, and an ongoing investigation by the Financial Markets Authority into Strategic's board.
