KEY POINTS:
A group aiming to sue the former directors and advisers of Feltex are considering whether to run a campaign asking burned shareholders to "opt in" to the lawsuit.
A High Court judge has ruled that legal action against former chairman Tim Saunders - now one of the Contact Energy directors under fire for raising directors' fees - six other directors, and four adviser firms, can go ahead.
The directors and advisers had asked the court to throw the case out, but although they succeeded on some points, Justice Christine French has allowed the main action to proceed.
The aim is to compensate thousands of mainly small shareholders who lost their entire investment when Feltex collapsed in 2006, and to hold the directors and advisers liable.
The organisers say the prospectus marketing the $254 million public float of Feltex in June 2004 was misleading. Nine months later the carpet maker's directors reported a half-year loss and slashed predictions for the company's full-year profit by more than half.
Feltex's fortunes went steadily downhill from there, and by September 2006 it was in receivership.
Earlier this year the organisers gained court permission to sue on an "opt out" basis - meaning shareholders were automatically a party to the legal action unless they actively removed themselves.
The group says shareholders will not be liable for any of the costs except as a cut of whatever payout they may get if the action succeeds.
However Justice French has reversed the "opt out" order and given shareholders until December 19 to "opt in".
