Directors Peter Harris and Alistair Hutchison had been trying to arrange a deal to save CBL, but today confirmed that attempt had failed

Directors of failed New Zealand insurer CBL Corporation have withdrawn their opposition to its liquidation.

At a hearing today in the Auckland High Court, directors Peter Harris and Alistair Hutchison said they didn’t oppose the action to liquidate the company as they had been unable to get the company’s bankers to agree to a Deed of Company Arrangement, the New Zealand Herald is reporting.

Harris said the refusal of the DOCA, a deal designed to save a company and minimise the loss of creditors, which can include forgiving some of a company’s debts, had been a “devastating blow.”

Its main subsidiary, CBL Insurance was placed in liquidation last November amid evidence of “chronic insolvency”.

High Court judge Justice Patricia Courtney had then ordered the immediate appointment of liquidators.

In a statement, Harris and Hutchison revealed in a statement why they had withdrawn opposition.

“Unfortunately, even after 15 months, the banks have not seen any material money from the sales of CBLC assets, most of which are still in process, so the very large bank debt has not been reduced,” they said.

“The banks have been prepared to give us time to present a structure for satisfying their debt, and we thank them for that, but with the debt not reduced after 15 months, we can’t deal with the total debt and they can’t continue to wait until we are just dealing with the residual debt.”

The firm’s troubles triggered an array of problems for UK and Irish policyholders across legal, home and motor, and was blamed for unrated Danish insurer Alpha also falling into liquidation.

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