Failed Feltex case costs litigation funders $3.1M in costs 27 Mar 2015
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- Actions For Young Driver Safety Get Green Light News
- NZ economy expands at fastest pace in two years Business
Failed Feltex case costs litigation funders $3.1M in costs, before disbursements
March 27 (BusinessDesk) - Former directors of Feltex Carpets and promoters of its 2004 initial public offering have been awarded a scaled-up $3.1 million in costs after being found not liable for alleged disclosure failings in its prospectus.
Once disbursements are included, total costs could rise to $5 million, before costs associated with the actual costs of the hearing.
In a judgement last September in the High Court at Wellington, Justice Robert Dobson found in favour of the defendants on all of numerous causes of action. Feltex investor Eric Houghton had sued the former Feltex directors, owners and sale managers in a representative action seeking $185 million including interest for shareholders his suit said had been misled by the 2004 prospectus.
Justice Dobson said in his March 24 decision on costs that the plaintiff had accepted that costs should follow but disputed the magnitude and increase of the costs claimed. However, the judge accepted some of the arguments put forward by the defendants, lifting the total costs in their favour by about $1 million compared to what is known as their scale costs entitlement.
Among their arguments was that the lawsuit sought hundreds of millions of dollars, forcing the defendants to take it seriously and bring in experts on arcane economic and financial matters that proved very expensive. The claims for costs included about $820,600 for US Professor Bradford Cornell, a senior consultant at Compass Lexecon, and $211,750 for Rob Cameron, of investment bank Cameron Partners. Lawyers for Houghton objected to those fees and various related expenses but Justice Dobson only agreed to a 35 percent reduction in costs for Professor Cornell.
"In complex commercial and regulatory cases, the court has been relatively liberal in not questioning the reasonableness of what, by New Zealand standards, are eye-wateringly high charges demanded by economists of international repute and other specialist experts in similarly arcane areas," he said.
Houghton won’t personally have to pay because the lawsuit was bankrolled by Harbour Litigation Investment Fund and Joint Action Funding Limited, which had accepted they would indemnify the plaintiff in the event the case failed.
The biggest award of costs was to the former directors, Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter and Peter Thomas, at about $932,000. Credit Suisse was awarded costs of $804,000, while First NZ Capital got $576,000 and Forsyth Barr got about $494,000.
Within a year of NZX listing, Feltex stock had become virtually worthless, thanks to a series of warnings that the company would miss its forecasts. Receivers were appointed in September 2006. Australian carpet maker Godfrey Hirst ended up buying the assets.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more