The long-running Feltex Carpets legal saga, which has seen a battle over the original prospectus issued in 2004 and which has continued since 2008 has seeking new funding for their claim against the directors, with the retirement of ‘Feltex Judge’ Justice Dobson delayed by at least a year.
Justice Dobson, who has turned 70 and therefore arrived at retirement age, has had retirement postponed by a year, at least.
Although the investors succeeded in their claim that the prospectus contained an untrue statement in their Supreme Court claim in 2018 they failed to prove that they had relied upon the statement, which was a revenue forecast directors could not reasonably assume would be achieved.
Feltex listed on the New Zealand NZX sharemarket in 2004 investors buying shares at $1.70.
The company went broke two years later with receivers appointed, leaving investors embittered and angry.
Justice Dobson provided Feltex investors “one last opportunity” to raise the funds to take their class action against the directors, who have sought to have the investors’ claim struck out.
Funds are being raised through JAFL Litigation Funding Partners, involving long-time Feltex battler Tony Gavigan who is promising a pre-tax return of $2 for every dollar invested. The company has raised $285,000 of the $500,000 sought via Collinson Crowdfunding with a closing date of 30 September.
Fundraising efforts have been hampered by the pandemic but by May the offer had raised over $200,000 towards the $500,000 minimum in a Level 3 funding requirement.
In a statement made in May, JAFL said “JAFL and JAFL Partners will not stop working for the FeltexClaimants who now very much want their Feltex money back in a world where their other investments and nest eggs face unexpected pressures. New Zealand can hardly afford to turn its back on an AIG $90m insured recovery of $200m of kiwi savings exported to issuer Credit Suisse New York in the second week of June 2004.”
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