Plaman cash in law firm's trust account

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Failed would-be diatomite miner Plaman Resources has total debt of more than $33.6million, but appears to have at least $17.8million cash in trust with a global law firm.

Plaman Resources' offshore Malaysian and Isle of Man shareholders placed the mine developer in receivership and liquidation this week, effectively quitting plans to develop a diatomite mine near Middlemarch, in Otago.

While unable to secure more capital, the project was coming under increasing pressure following disclosure of a confidential and unflattering Goldman Sachs report, which prompted geologists and the public to question destruction of the unique fossil hoard, trapped in the diatomite layers and said to be destined for pig food.

Investment bank Goldman Sachs lent its subsidiary NZ Commercial Ventures $US20million ($NZ30.6 million) in May last year, as a bridging loan, repayable by May next year.

Yesterday, liquidator McGrathNicol released its first report, showing total liabilities at $33.6million and assets of $18.2million, of which $17.8million was held by US law firm Norton Rose Fullbright, in a trust account.

"The [Plaman] directors advise that as a result of previously publicised delays in Overseas Investment Office consent, the company was unable to acquire the adjacent [Foulden Hill farm] land, nor complete the corporate reorganisation required to secure new capital," the liquidator said.

Plaman's directors are Sydney businessmen George Manolas and Peter Plakidis. The secured creditors are NZ Commercial Ventures and Royal Wolf, while trade creditors include the respective family trusts of Mr Manolas and Mr Plakidis, also both cited as creditor employees. No liquidation timetable was given.

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