McDonald Vague Successful in Aussie Debt Claim

Media Release
DML Resources (In Liquidation)
23 May 2005

McDonald Vague, Liquidators of DML Resources Limited (In Liquidation), Successful in Aussie Intercompany Debt Claim

The liquidators of the failed mining company DML Resources Limited (In Liquidation), once part of the failed Skellerup Group, have been successful in negotiations with the liquidators of the Australian company DML Resources Pty Limited (In Liquidation), bringing a further $1.06 million in as settlement. The New Zealand company was the largest creditor of the Australian company.

As a result, the New Zealand liquidators are making a further payment to unsecured creditors.

“We will pay a further dividend of 10 cents in the dollar to all admitted unsecured creditors and a further one off payment of 19 cents in the dollar to those unsecured creditors entitled to the funds in the specially created Voidable Preference Trust arising out of the earlier settlements of a large number of voidable transaction claims,” said liquidator Graeme McDonald, of insolvency and recovery specialists McDonald Vague.

Distributions to admitted unsecured creditors have been as follows:

* 2001 Five cents in the $1.00
* 2004 Sixty cents in the $1.00
* 2005 Ten cents in the $1.00 (going out this week)

This means that all undisputed unsecured creditors will soon have received at least 75 cents in the $1.00.

These funds come largely from:

1. Receipt of funds from the receivers and the debentureholders;
2. Substantial settlement in respect of a “Coeur Gold” legal action;
3. Multi-million dollar out of court settlement of a claim brought against the directors of the company;
4. As a result of settlement with the liquidators of associate company DML Resources Pty Limited (Australia).

A further 19 cents in the $1.00 is to be paid to creditors entitled to participate in the Voidable Preference Trust for DML Resources (as stated earlier). Payments to this class of unsecured creditors will total 94 cents in the $1.00 following this payout. All secured creditors’ claims were satisfied early in the liquidation, in order of priority.

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DML Resources (In Liquidation)……2

“This is more than we ever expected when we took on the liquidation in 1998 with no money,” said Mr McDonald on behalf of the liquidators. “The liquidation has been difficult, and fraught with legal wrangles, complex negotiations and settlements. It continues to satisfy us to deliver a good result to patient creditors, who agreed to support us in our actions.”

One other legal matter remains outstanding before the conclusion of the liquidation. “We continue to await the outcome of protracted legal action in Malaysia,” said Mr McDonald.

DML Resources Limited (In Liquidation) was once the largest single asset in the failed Skellerup Group, and was a mining company. It was placed into receivership on 1 November 1997. McDonald Vague became liquidators on 7 May 1998 as the result of approaches from larger creditors. Four months after appointment, joint liquidators Graeme McDonald and John Vague negotiated a settlement with secured creditors (debentureholders) and they agreed to waive any further claims. Cash and assets were transferred to the liquidation and work on recovery for unsecured creditors commenced.

Creditors have been represented at all times by an able, hardworking liquidation committee. That committee has worked with the liquidators to bring this most satisfactory result.

McDonald Vague was established in 1989 as New Zealand’s first specialised insolvency practice. It remains one of the largest, independent national practices focused solely on insolvency and business recovery in New Zealand.

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