Bridgecorp's demise

Monday, July 2nd 2007, 10:21PM

Well I have to say the collapse of Bridgecorp is no surprise. Rumours have been swirling around the market place for over a year now about its imminent demise.

It's not a collapse anyone wants to see, and I feel sorry for investors. However there are some useful lessons already.

One is that these rumours have been helped by a couple of factors. Some in the media have dislike for the head of Bridgecorp, Rod Petricevic. I've never met the guy so can neither comment nor pass judgment. HOwever it is true he has his enemies.

Secondly, Bridgecorp has done itself no favours with the media. It has refused to do interviews and will only provide written answers to questions.

To my journalist mind this is a very narrow-minded approach to communications and can only fuel negative sentiment.

More recently Bridgecorp has been acting in a highly defensive mode. Here at Good Returns we have been on the receiving end.

A while back the Independent ran a story about how Bridgecorp had hived some loans off to another company.

The main points of the story were correct, however there were a number of errors, apparently minor in nature, which the paper corrected.

We ran a story, of just several pars, saying the Independent had run this story - fact. And to add balance, that Bridgecorp had called in it lawyers over the item - fact.

We didn't report the substance of the original article, rather reported it had happened. All rather factual and balanced.

The ensuing correspondence from Bridgecorp's lawyers, Bell Gully, was, in my view threatening and intimidating.

It seemed they were hell bent on closing this story down at any cost.

A number of people I discussed this with suggested that it was signs of a company in trouble.

They were obviously correct.

I wonder if their lawyers got paid or are now just one of, no doubt, many unsecured creditors?

PS: This collapse raises many other questions, such as what impact will it have on the finance company sector, how good are the ratings agencies? Remember one ranker gave Bridgecorp an AAA not that long ago. These are issues we will address, however we would love to hear from readers about their views on the collapse and its impacts. Send your comments to blog@goodreturns.co.nz

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