Two directors of CBL Corporation say a restructuring plan could have saved the collapsed insurance group.
CBL Corporation was placed into liquidation by the High Court in Auckland this morning. Photo: RNZ / Cole Eastham-Farrelly
CBL directors Peter Harris and Alistair Hutchison have attacked the administrators of its insurance subsidiary and the Reserve Bank for killing off the restructuring plan.
The company was placed into liquidation by the High Court this morning on the application of two Chinese banks.
The hearing was delayed for more than a year as Mr Harris and Mr Hutchison tried to put together a restructuring plan for the insurance subsidiary, but they claim the plan was stymied by the subsidiary's administrators, McGrathNicol, and the Reserve Bank.
"It (the rescue plan) would have provided a viable commercial pathway... their actions over the past 15 months call for an explanation to New Zealand policyholders and creditors, and to the public," Mr Harris said.
The plan aimed to sell off the problem parts of the business in France, raise new capital for the insurance business, and retain the profitable parts of the group.
Mr Harris said the central bank and administrators consistently put too high a value on the amount of possible future claims, and tried to tempt two big creditors with the prospect of repayments to support their point of view.
"Why was it done in secret without notifying all creditors, and why should the largest CBLI creditor get paid in full when not one other creditor or New Zealand policyholder claim gets paid at all ?" Mr Harris said.
The plan would have allowed a significant amount of debt to be repaid and the survival of the CBL parent company, but the administrators and the Reserve Bank were "relentlessly focused" on putting the insurance business into liquidation, he said.
CBL Insurance company's net liabilities have been put at between $25 million and $343 million.
At one stage CBL Corporation, which was listed on the NZX, had a value of about $750m.
A report into how regulators handled the group's failure is due out in a few weeks.
The Financial Markets Authority and the Serious Fraud Office have investigations into the CBL Group's collapse.
McGrathNicol and the Reserve Bank have been approached for comment.