Feltex shareholders granted hearing
Former Feltex shareholders will get another day in court in a legal battle which has raged for more than 10 years.
The Supreme Court has granted an oral hearing on the case led by Eric Houghton, representing Feltex shareholders left out-of-pocket after the carpet manufacturer folded in 2006.
When the company collapsed, about 8000 investors lost a total of $200 million.
On April 5, the Supreme Court will allow a hearing for the appeal granting counsel for the applicant 30 minutes for oral submissions. The respondents will have 45 minutes to submit, followed by 10 minutes of the applicant’s replies.
“Without this, the case is a dead duck,” said Tony Gavigan, director of Joint Action Funding.
In 2014, the Wellington High Court’s Justice Robert Dobson cleared the former Feltex directors of misleading in- vestors in the company’s prospectus, but did note there were some criticisms to be made of the offer documents.
Houghton lodged an appeal with the Court of Appeal which was dismissed in October last year.
Within a year of NZX listing, Feltex stock was virtually worthless, thanks to a series of warnings that the company would miss its forecasts. Receivers were appointed in September 2006.
Houghton sued the former Feltex directors, owners and sale managers on behalf of 3639 former shareholders seeking $185 million over what he alleged was a misleading 2004 prospectus.
Rival Australian carpetmaker Godfrey Hirst ended up buying the assets.
The action alleges that the company’s prospectus in 2004 — the year it floated — contained information that was misleading or wrong, or omitted to make information available that would have affected investment decisions.