Business

CBL Corporation owes $179.4 million to creditors

Embattled insurance company CBL Corporation owes $179.4 million to creditors and it's unknown how much they may get back, if any.

The first liquidator's report by KordaMentha could not determine the state of the company's finances because five subsidiaries have yet to be sold, and its insurance businesses are ring-fenced.

CBL Insurance (CBLI) is in liquidation, while CBL Insurance Europe is in administration.

"We cannot reliably determine that value, because two of the company's largest subsidiaries are under the control of other insolvency officials," the report said.

The amount that might be gained from the sale of other subsidiaries was not disclosed, but liquidator Neale Jackson said the sale of AssetInsure in Australia was close to being finalised.

CBL Corporation was placed in liquidation in May at the request of the Bank of China and the Industrial and Commercial Bank of China - they and ANZ have the largest claims against the company.

Other creditors included the Financial Markets Authority, NZX, Deloitte, KPMG Luxembourg, brokers First NZ Capital and Forsyth Barr, and legal and public relations advisors.

Meanwhile, the liquidators of CBLI, McGrathNicol, spent the six months to May reducing its risk and liability.

The second liquidator's report said they had entered into an agreement with one of its major reinsurers and had moved most of its bond holders to alternative cover from other providers.

Liquidator fees for the period totalled $1.1 million.

They had not yet called for creditors to lay claims, and would not reveal their findings of investigations into the conduct of directors and executives, which may have had a bearing on the company's insolvency.

"Due to the ongoing nature of these investigations and potential legal consequence, we are unable to provide details of our findings to date as doing so could prejudice any future proceedings."

CBLI was put into liquidation at the request of the Reserve Bank, after a year long High Court battle which heard allegations of impropriety, manipulation, bullying and involvement in illegal activity by the company.

CBLI director Peter Harris has denied any wrongdoing and has criticised the Reserve Bank's actions.

The Serious Fraud Office and the Financial Markets Authority are investigating various aspects of the collapse of the CBL group and its subsidiaries.

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