RBNZ comment on CBLI court judgment released today
The Reserve Bank continues to support the full liquidation of CBL Insurance Ltd (CBLI).
The High Court appointed interim liquidators to CBLI in February after an application by the Reserve Bank. The interim liquidators had since applied for court sanction for a transaction they had negotiated with CBLI’s major creditor.
The application was opposed by other parties – including one other creditor, the remaining directors of CBLI and the shareholder of CBLI (represented by the administrators, Korda Mentha).
In a judgment released today, the High Court did not comment on the merit of the deal but found that to enter it would exceed the powers of interim liquidators.
The Reserve Bank supported the transaction negotiated by the interim liquidators, but accepts the Court’s finding that it cannot be effected in interim liquidation.
This outcome reinforces the Reserve Bank’s desire for the full liquidation of CBL Insurance Limited. The Reserve Bank’s application is scheduled to be heard in the High Court at Auckland from 12 November.
The Reserve Bank is seeking to have existing confidentiality orders removed for the full liquidation hearing.