Another finance company has hit trouble, with the receivership of Auckland-based financier Clegg and Co Finance which has left little in the way of shareholders' funds.
Brian Mayo-Smith and Shaun Adams of BDO Spicers have been appointed receivers after Clegg and Co told the Covenant Trustee Company onSeptember 27 that its trust deed had been breached to a "significant extent".
Covenant Trustee Co ordered the receivership after Clegg and Co directors and shareholders were unable to rectify the breach of the company's related party loan restriction clause, Covenant managing director Graham Miller said.
"In Covenant Trustee Company's view, the level of provisioning required against this Related Party debt means that Clegg & Co Finance has minimal if any residual shareholders funds," Mr Miller said.
Clegg and Co Finance was founded by Brian Clegg in April 2002, and finances commercial plant finance leases and other secured lending contracts, according to the company's website.
Mr Clegg had earlier set up Classic Finance in 1995 to finance hire purchases and other secured lending, mainly second mortgages.
Nine finance firms have already collapsed in 16 months, owing investors $1.2 billion.
