5 Apr 2012

Legal action intended against NZF Money

12:40 pm on 5 April 2012

The receiver of NZF Money is planning to take legal action against its parent company and some of its directors.

NZF Group subsidiary NZF Money, which mainly provided commercial and residential loans collapsed in July last year, owing $16.4 million to investors.

NZF says NZF Money's receivers, KordaMentha, plan to file legal proceedings against it, and certain past and present directors.

The company says it will rigorously defend the proceedings, which relate to an internal restructuring of NZF Homeloans in October 2010 which is alleged to be an insolvent transaction.

NZF says the receivers have also applied for a court order to freeze the group's assets.

The company is already under investigation by the Serious Fraud Office over related party loans.

It is in talks with its trustee about converting its debt to shares, after saying it won't generate enough cash to pay its noteholders when they mature in 2016.