Featherston creditors to vote again

Creditors of failed Dunedin fertiliser company Featherston Resources are to have a second meeting on whether to accept or reject a $A4.8 million ($NZ5.2 million) bail-out offer.

The case of Featherston, which had been processing diatomite at its plant near Mosgiel, is

to come before the Supreme Court of New South Wales in July. Its directors are accused of breaching ''general law and fiduciary duties'' to Featherston.

Facing the allegations are Featherston's managing director and director Emma Weston and shareholders and directors Simon Kember and Timothy Goodacre.

Featherston spent about $15 million of funds from more than 200 shareholders over 16 years but after it opened in early 2011, trading was nowhere near expectations and it was placed in receivership in January, owing an estimated $5 million to creditors.

Yesterday, Auckland administrator Rodgers Reidy advertised a second meeting for creditors, next Thursday in Auckland.

As with the first meeting and vote, creditors may opt to accept the bail-out proposal, to get some or all of their money back. However, that offer cedes control of Featherston to another company and shareholders are left out of pocket.

Rodgers Reidy joint administrator Paul Vlasic said yesterday the Auckland meeting would offer creditors a ''varied deed of company arrangement'' - Australian company Plaman Group's $A4.8 million bail-out offer, containing only ''subtle changes''.

He was unable to release offer details, as is was a document for creditors only.

The legal issues are multi-faceted, with court jurisdiction open to interpretation; it is an Australian company operating in New Zealand, a separate receivership is under way under New Zealand legislation, and shareholders in Australia are taking action against Featherston's former directors and also want the Plaman bail-out offer reviewed.

Mr Vlasic said the litigation in the Supreme Court in Australia was separate from the receivership.

The creditors, who have already voted to accept the Plaman Group offer, will decide next week whether to accept the revised offer. If they reject it, Featherston could be wound up.

- simon.hartley@odt.co.nz

 

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