Feltex shareholders get final chance

Feltex director Peter Thomas and chairman Tim Saunders arrive at the Auckland District Court in 2010. Photo / Dean Purcell

Former Feltex shareholders will get another day in court in a legal battle which has raged for over ten years.

The Supreme Court has granted an oral hearing for the appeal case led by Eric Houghton representing Feltex shareholders left out-of-pocket after the carpet manufacterer folded in 2006.

When the company collapsed, roughly 8000 investors lost a total of $200 million.

On 5 April, the Supreme Court will allow a hearing for the appeal granting the counsel for the applicant 30 minutes for oral submissions.

The respondants will have 45 minutes to submit, followed by 10 minutes of the applicants replies.

"Without this, the case is a dead duck," said Tony Gavigan, diretor of Joint Action Funding Limited. "The long fight would be over."

In 2014, the Wellington High Court's Justice Robert Dobson cleared the former Feltex directors of misleading investors in its prospectus, but did note there were some criticisms to be made of the offer documents.

Houghton lodged an appeal with the Court of Appeals which was dismissed in October of last year.

Within a year of NZX listing, Feltex stock was virtually worthless, thanks to a series of warnings that the company would miss its forecasts. Receivers were appointed in September 2006. Houghton had sued the former Feltex directors, owners and sale managers in a representative action on behalf of 3,639 former shareholders seeking $185 million over what he said was a misleading 2004 prospectus.

Rival Australian carpet maker Godfrey Hirst ended up buying the assets.

The action alleges that the company's prospectus in 2004 - the year it floated - contained information that was misleading or wrong, or omitted to make information available that would have affected investment decisions.