Doubt over $11m owed to unsecured creditors

Unsecured creditors caught up in the $57 million receivership of Southern Cross Forest Products are owed almost $11 million, but it is unclear if funds will be available for them.

After confirmation yesterday from receiver KordaMentha that all South Island staff will be made redundant, the extent of payments to secured and unsecured creditors remains unknown.

Southern Cross was placed in receivership by ANZ in March.

The business owes ANZ $39 million and UDC Finance Ltd $7.2 million.

In KordaMentha's first report, lodged earlier this month, joint receiver Brendon Gibson said total assets had been estimated at $57.74 million, including $26 million in property, 10 properties which are mortgaged, plant and equipment.

Southern Cross' entire liabilities to secured and preferential creditors was about $47.54 million.

Mr Gibson said when contacted yesterday the preferential creditors, which included staff wages and redundancies, would get paid in full.

But how much secured creditors might get could not be determined until assets were sold, he said.

''Based on the information available to us, we believe that the unsecured creditors are owed approximately $10.8 million,'' Mr Gibson said in his first report.

At least 34 secured creditors with claims are listed on the Personal Property Securities Register against goods and services provided to Southern Cross.

Mr Gibson said the only assets sold or realised so far were inventory, ranging from logs through to finished timber products, and debts owed to Southern Cross.

At the time of receivership, inventory was estimated to be valued at $11.5 million, while debts from trade and other receivables was estimated at $11.25 million.

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