Shortfall on large loans
PA Wellington Judge Corporation’s secured creditors, the BNZ and NZI Securities, will fall well short of recovering large loans made to Judge. However, it is understood both institutions included the losses in post-crash writedowns earlier this year.
Neither the BNZ nor NZI would respond to comments by Judge directors that their dispute over priority of security over assets had cost any chance of salvaging anything for Judge shareholders.
Although the BNZ’s general manager of invest-
ment banking, Mr Graeme Pentecost, refused to say whether losses linked to Judge had already been written off, it is believed they were included in writedowns of nearly $4OO million made since the sharemarket crash last year. Judge directors claim no money is owed to the BNZ, after the BNZ agreed to buy a 19.9 per cent stake in Ariadne Australia. They said the agreement was struck last April at AustlOOc a share in a deal which would have been worth about SIOOM. The Ariadne shares were later sold to Essing-
ton Group in a cash and share deal which valued the shares at 50c each.
Mr Pentecost yesterday maintained the BNZ’s traditional policy of not commenting on customer matters.
We acknowledge that while substantial progress had been made in. realising assets of the group, it is our view that outstanding matters are best handled through a receivership. NZl’s managing director, Mr Harry Kember, said the receivership was the only available option for Judge after every effort was made to save it. Asked whether there
was one main stumbling block which made the receivership inevitable, he said: “It was one big stumbling block.” NZI had already accounted for its share of the Judge Corp loss, he said.
The receiver, Mr Alan Isaac, of Peat Marwick, said it might be necessary to get direction from the court if disputes between Judge directors and the secured creditors could not be resolved. Judge Corporation’s statement of affairs, which would outline its indebtedness, would probably not be made public for three months.
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Press, 8 December 1988, Page 26
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337Shortfall on large loans Press, 8 December 1988, Page 26
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