Finance company Boston Finance, one of the many currently in a moratorium, has been finally put into receivership.
Grant Graham and Brendon Gibson of KordaMentha have been appointed receivers, formally ending its moratorium arrangement which has been in place since March last year. Today's move was widely expected.
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press release says it is "the view of both the trustee and directors of Boston Finance is that seeking an extension to the moratorium would have resulted in a costly process for investors, with little or no benefit to them."
"Despite the challenging economic environment, the moratorium has enabled the directors to use their knowledge of the company to maximise recovery of 24 of the original 32 loans and put a strategy in place to maximise the recovery of the remaining 8 loans. Up to this point, the trustee, KordaMentha and the directors of Boston Finance consider a moratorium has been more beneficial than a receivership."
At the time of the moratorium in March 2008, 1,300 investors had approximately $38.5 million invested in Boston Finance. Since then, $14.24 million has been repaid to investors equating to a return of 37 cents in the dollar. This includes a distribution of $2.3 million to be made now.
The release goes on to say that there are eight loans to be recovered with a book value net of provisions of $15.85 million.
"A substantial portion of the dollar value of these eight loans is subject to High Court litigation so it is too difficult to accurately estimate timing and recovery quantum."
Perpetual Trust Head of Corporate Trust, Matthew Lancaster, said the trustee decided receivership was in the best interests of investors because it was now the most effective and efficient option.
"While a moratorium was the appropriate course of action in 2008, investors' interests will now be best served by a receivership. We are confident that the loan recovery process is now at a stage where a professional receiver can best maximise recoveries of remaining assets."
When Boston Finance entered into its 20-month repayment plan in March last year, it promised to pay investors back all of their money as well as 9 per cent interest.
According to its annual report Boston Finance loaned money for a number of Blue Chip apartments.
Boston Finance went into moratorium several months before its sister company OPI Pacific Finance, both of which were ultimately owned by Australian investment company Octaviar.
OPI Pacific Finance was recently placed into receivership after Octaviar went liquidation. But Lancaster said Boston operated as a separate company and the fate of OPI was not linked to it
Boston Finance lent money for property developments like the Chifley Suites, seen here in Auckland's Albert St. Photo / Herald on Sunday.
Finance company Boston Finance, one of the many currently in a moratorium, has been finally put into receivership.
Grant Graham and Brendon Gibson of KordaMentha have been appointed receivers, formally ending its moratorium arrangement which has been in place since March last year. Today's move was widely expected.
A
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