IMF looks to fund class action over failed Retail Adventures
IMF announced on Tuesday it intended to fund an investigation, public examinations and legal proceedings to recover losses incurred by unsecured creditors of Retail Adventures who are owed $165 million. It said it was approached by an action group set up by creditors called Retail Adventures Creditors Unite.
"They've approached us as they have concerns about the way the administrator is excluding them from the process," IMF executive Paul Rainford said.
Most of the debt relates to suppliers who face a zero return from the sale of Retail Adventures back to Ms Cameron this month for $59 million.
The amount will be credited against Ms Cameron's secured debt over the business totalling $77 million. This secured debt is one of IMF's targets. "The claims relate to allegations of insolvent trading by Retail Adventures and the enforceability of securities held by companies associated with Jan Cameron," IMF said in a statement to the stock exchange.
IMF said funding was conditional on a sufficient number of unsecured creditors executing the agreement. It is understood it needs creditors with $40 million worth of claims to sign on before it can proceed.
It also needs creditors to vote to put the company into liquidation at the second creditors' meeting in August.
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IMF (a litigation funder) said it intends to fund an investigation, public examinations and legal proceedings to try to recover losses for unsecured creditors of Retail Adventures who are owed about $165 million.
The article says IMF has targeted Jan Cameron — the founder of Kathmandu who bought Retail Adventures out of receivership in 2009 — over allegations of insolvent trading by Retail Adventures and questions about the enforceability of securities held by companies associated with her.
According to the article, unsecured creditors are owed about $165 million. Most of that debt relates to suppliers who currently face a zero return from the sale of Retail Adventures back to Jan Cameron for $59 million.
The sale of Retail Adventures back to Jan Cameron for $59 million will be credited against her secured debt over the business, which totals $77 million. IMF has said that secured debt is one of its targets in any recovery action.
IMF said the claims relate to allegations of insolvent trading by Retail Adventures and the enforceability of securities held by companies associated with Jan Cameron, based on its statement to the stock exchange.
IMF said its funding is conditional on a sufficient number of unsecured creditors executing the funding agreement. The article reports it needs creditors with about $40 million of claims to sign on before it can proceed.
Retail Adventures Creditors Unite is an action group set up by creditors that approached IMF because they were concerned about how the administrator was excluding them from the process. IMF said it was approached by this group.
The article says creditors would need to vote to put the company into liquidation at the second creditors' meeting in August. Such a vote could affect the administrators’ process and is relevant to IMF’s planned investigation and any recovery actions.
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