The Supreme Court has granted the sellers of failed carpet maker Feltex leave to appeal a class action being led by former shareholder Eric Houghton over whether some or all of the 3000 investors who have joined the action were time-barred.
Chief Justice Dame Sian Elias and Justice Robert Chambers today granted Credit Suisse Private Equity and Credit Suisse First Boston Asian Merchant Partners leave to appeal a ruling which paved the way for a class suit over the way Feltex was floated on the stockmarket in mid-2004.
The investment bank can re-litigate whether some or all of the shareholders represented by Mr Houghton are time-barred from joining the action, according to a judgment published today.
Last November the Court of Appeal turned down an attempt by Credit Suisse, Feltex's former directors and executives and joint lead managers Forsyth Barr and First NZ Capital to throw out the case.
The appeals in the lower court fell broadly into three categories:
- The way the case was being managed should not be allowed.
- Statute of limitation rules should prevent shareholders seeking redress.
- That some claims were not sufficiently made out to pass tests of arguability.
Feltex collapsed in 2006 owing creditors between $30 million and $40 million, and destroying some $254 million in shareholder value.
The company's directors at the time of the offer were Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter David and Joan Withers.
If the case finally gets to court, the Feltex action will be divided into two stages. The first will hear Mr Houghton's entire case, with the second using the first for binding rulings on common claims.
(BusinessDesk)
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Supreme Court grants Feltex vendors leave to appeal time-bar in class action
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