CBL administrators announce date for watershed meeting, liquidation opinion to come

Friday 11th May 2018

CBL Corp's voluntary administrators say a creditors' watershed meeting will be held next week, with their opinion on whether the company should be liquidated to be released today.

Auckland-based CBL appointed KordaMentha voluntary administrators on March 2 after the Reserve Bank sought an interim liquidation of its New Zealand supervised arm and the Central Bank of Ireland made a similar move against the insurer's European division.

The second meeting of creditors gives them the choice to resolve that a deed of company arrangement be executed, resolve that the administration should end, or appoint liquidators. In March, the Auckland High Court granted the administrators orders extending the date by which it must call the watershed meeting, normally held within 25 working days of the appointment of administrators, until today.

The meeting will be held in KordaMentha's Auckland offices at 3pm on May 18, the administrators said. The related report to creditors and other supporting information, including the administrators' opinion on the matters for creditors to vote upon at the watershed meeting, will be issued to creditors, the NZX and ASX by the end of today.

However, the administrators have obtained separate orders from the Auckland High Court to extend the date for the watershed meetings of various CBL subsidiaries until Aug. 10. Those subsidiaries include LBC Holdings New Zealand, LBC Holdings Americas, LBC Holdings UK, LBC Holdings Europe, LBC Holdings Australasia, LBC Treasury Company, Deposit Power, South British Funding, and CBL Corporate Services.

Yesterday, the New Zealand Shareholders Association said in a statement it believes liquidation is "in the best interests of investors and offers more options for securing residual value".

NZSA said liquidators would have greater powers to pursue a variety of potential claims if litigation is necessary, and the organisation "would support the appointment of a strong independent liquidator who would act in the best interests of all who have been or may be affected in this case."

CBL had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority, the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL’s international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.

(BusinessDesk)

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