Just as the door closes on one of New Zealand's biggest business insolvencies, Graeme Thompson, the central figure in the collapse of Fortex Group, is due back in court.
Liquidator Bruce McAlister will soon remove Fortex Group from the company register, more than eight years after the Christchurch-based meat processor went
into receivership, and then liquidation, owing creditors about $130 million.
Unsecured creditors, including farmers and trade groups, lost about $28 million, which was never recovered.
The liquidator's role was minor because there was no money left after the receivers handed recovered funds to the trustee for the secured creditors.
The receivers, Wellington-based KPMG accountants led by Alan Isaac, were appointed on March 23, 1994, and closed their books in April this year.
For much of that time, the receivership took a back seat to Serious Fraud Office actions, leading to jail terms for managing director Thompson and one of his executives.
Thompson returns to the High Court in Christchurch on July 29 for a scheduled five-day trial on a charge of breaching a five-year ban from running a business, imposed at the time of his sentencing in 1996.
The Crown alleges that he started work for a Stewart Island-based business before his parole in September 1998, and then took on a management role.
The receivership was extended by High Court proceedings by Isaac and Tower Trust, as trustee for the banks which funded Fortex, against the company's auditors, the then PriceWaterhouse group.
Initially, the claim was for up to $170 million, but it was eventually settled out of court in mid-2000, with the terms subject to a confidentiality clause.
At the time, Isaac said the settlement had "fallen a bit short" of recovering the $60 million to $70 million needed to fully make up the losses suffered by the first and second-ranking debenture holders.
The final receiver's report in April noted that the March 1994 debt to creditors was first ranking owed $85.8 million, second ranking owed $13.5 million, and unsecured creditors owed $28.6 million. The total recovered by the receiver was $104.2 million.
Costs took up $12.8 million, including receiver's fee of $2.3 million.
Of the balance, first ranking creditors received $86.9 million (slightly more than the principal owed), and preferential creditors (Inland Revenue and some employee entitlements) took up $4.4 million.
However, the receiver's summary does not include any income from the settlement with the auditors, which was likely to have been paid directly to the trustee.
Indications from the comments made in June 2000 were that the bulk of the funds provided some interest revenue for the first ranking creditors, plus some payment to the second ranking creditors.
The first group included New Zealand banks and financial institutionsand the second mainly overseas banks.
- NZPA
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