25 Feb 2014

Higher payout for Lombard investors

10:10 am on 25 February 2014

Investors in the failed Lombard Finance and Investments firm will receive a higher than expected payout, though it's likely to be only a quarter of what they invested.

One dollar coin

Photo: RNZ

Receivers John Fisk and Colin McCloy of PWC say they have reached a settlement with Lombard's directors, their insurers and a third party for $10 million.

When Lombard was placed in receivership in 2008, it owed 3500 investors more than $111 million. Four directors were later convicted of making false statements in a company prospectus.

The settlement follows a civil claim by the receivers against Lombard's directors for breaches under the Companies Act.

Secured creditors have so far received 13c for every dollar invested, and Mr Fisk says this settlement lifts that to 22c, compared to the estimated return of 20c.

He says with two remaining properties to deal with, he now estimates they will get about 25c in the dollar.