Capital + Merchant Finance receivers Grant Thornton have uncovered a $41 million chunk of related party loans not recorded as such on the company’s books – most of which they have been unable to recover.

Just $1.75 million has been reclaimed from these loans with the rest written off. Investigations by the receivers and the Securities Commission are underway into this and other company transactions.

These estimates came in the latest receiver’s report filed by Grant Thornton with the Companies Office, confirming that the company’s cupboard is bare of other assets.

This follows advice last year www.nbr.co.nz/article/nothing-left-capital-merchant-investors-38124 from second receivers KordaMentha that debenture investors owed $167 million would have to rely on insurance claims and legal action to recoup any money.

KordaMentha will be responsible for making any insurance claims.

First receiver Grant Thornton was appointed by prior-ranking moneylender Fortress. Fortress has already been repaid $20.6 million and stood to collect a further $2.9 million due as at November 23 last year.

But accrued Fortress interest and receivers’ fees have eaten up the $4 million left in the kitty for debenture investors – a dire turnaround from the first forecasts of a 14-59% return.

Insurance claims could still recoup 19c in the dollar, Grant Thornton estimated.

The insurance policies on a number of Capital + Merchant loans had been invalidated but the receiver has kept payments up to date on other potentially eligible loans.