The receivers of Equitable Mortgages have repaid $35 million of the property lender's debts but expect an eventual shortfall against the $178 million owed to the Crown under the retail deposit guarantee scheme.
The receivers of Equitable Mortgages have repaid $35 million of the property lender's debts but expect an eventual shortfall against the $178 million owed to the Crown under the retail deposit guarantee scheme.
Receivers Grant Graham and Brendon Gibson of KordaMentha say in their second report that it will not be possible to recover the full $188.4 million worth of loans outstanding at the time of receivership but are yet to confirm what portion can be collected.
Equitable, part of Equitable Group owned by Christopher Spencer, went into receivership in November last year.
Many of its loans were first ranking for commercial, industrial and residential property.
Of those loans $14.4 million is owed by two companies in receivership that were owned by Wellington property developer Terry Serepisos.
“Based on our preliminary estimates, we believe it is extremely unlikely there will be a return to unsecured creditors and we expect there to be a shortfall owing to investors and the crown,” Mr Graham said.
Unsecured creditors are owed about $25,000 but that figure is likely to increase if and when the Inland Revenue Department submits a claim.
The Auckland-based Equitable had about 6000 depositors and some $192 million in deposits.
Approximately $178 million of these deposits were covered by the extended Crown Retail Deposit Guarantee Scheme.
As at June 24 the Treasury had repaid 78% of those investors.
Mr Graham said the $35 million payment was made to the Crown and to investors not covered by the scheme. The payment equates to approximately 18% of the amount owing.
Deloitte's Rod Pardington and David Levin were initially appointed Equitable's receivers but replaced by KordaMentha on December 17.
Deloitte said it had came to its attention that continuing as the receiver of Equitable Mortgages “may give rise to audit independence issues” for Deloitte.
