Doug Somers-Edgar's company plans to offer some solutions. Photo / Martin Sykes
The trustee for Doug Somers-Edgar's Orange Finance, which ceased making repayments to investors late last year, says he is waiting to see details of management proposal to address breaches of the company's trust deed.
Late last year Somers-Edgar, who founded the investment advisory business Money Managers, told Orange
Finance debenture holders the property market squeeze had put some of the company's largest loans at risk and it had therefore decided to stop repaying maturing debentures and interest from December 22.
The Business Herald understands that aside from its failure to make repayments to investors, the company has breached other terms of its trust deed.
Yesterday, trustee Graham Miller, of Covenant Trustee Company, said Orange had come up with proposals "which they feel will fully address the breaches of the trust deed and we're currently waiting for the full details of that in order to have them properly evaluated".
If the proposals are not acceptable, Orange may put forward a moratorium proposal, otherwise Miller will have no choice but to call in receivers.
Orange ceased raising new money from the public last August. It mainly lent funds for residential first mortgages, after raising debentures from the public via Money Managers, from which Somers-Edgar stepped aside in June.
Money Managers has previously been criticised for the way it channelled funds into investment products associated with itself and Somers-Edgar, including six trusts called First Steps, which closed two years ago owing more than $450 million.
Companies Office returns Orange filed for the year to March 31 showed $39.4 million in secured debentures on the debit side, and $41 million of net loans and advances among assets of $58.4 million.
