Liquidators of Peregrine Derivatives, a subsidiary of failed securities house Peregrine Investments Holdings, have realised net cash assets of $403 million as at May 31 - sufficient for a 20 per cent payout to creditors. Speaking at a meeting yesterday between former Peregrine directors and creditors, Price Waterhouse partner Stephen Caswell said creditors could expect to be paid a dividend of at least 20 cents in the dollar by this time next year. A maximum payout to creditors of 40 per cent was the auditing firm's 'best guess at this time', Mr Caswell said. Peregrine Investments - which acted as group treasurer - is Peregrine Derivatives' biggest creditor, representing about one-third of its total liabilities. Peregrine Derivatives had assets of about $1 billion against liabilities of $2.54 billion, he said. Mr Caswell said those figures assumed a 45 per cent default rate on remaining securities held by the company and no more contingent liabilities. 'The low end of the range is about the amount of cash we've recovered so far,' Mr Caswell said. He said the final payout would also depend on the health of some Peregrine debtors, who were also suffering from the Asian financial crisis. Price Waterhouse has collected about $407 million by selling assets, retrieving $92 million from profitable trades and recovering cash Peregrine Derivatives had on deposit with several banks and brokers. It was also revealed that Peregrine Derivatives recorded audited losses of $200 million to November last year, after having earned $54 million during the previous two years. Price Waterhouse was confirmed as the official liquidator yesterday. Mr Caswell said there were a number of issues within Peregrine which still concerned the liquidation team - including the backlog in reconciling inter-company balances, stock borrowing and lending arrangements within the group, proprietary share-trading positions, six outstanding guaranteed Korean equity-linked certificates and 10 outstanding warrant issues. Price Waterhouse is chasing more than 200 transactions involving over 200 counterparties. While the auditors have attempted to value these positions, the lack of market quotations and the lack of automatic clauses in most of the contracts closing the positions should one party fail had complicated the task, Price Waterhouse said. Depending on market movements, positions could equally end up in the red or the black, making it difficult to pinpoint the actual financial position. Price Waterhouse's partner in charge of the Peregrine liquidation, David Hague, confirmed that a forensic auditing team had completed a preliminary report - separate from the Securities and Futures Commission's probe - dealing with the conduct of the investment bank's directors and financial advisers, bank financial controls and events leading up the bank's demise. 'The report has identified potential areas for further investigations,' Mr Hague said. Potential legal actions would have to be balanced by the likely costs versus the potential benefits. Liquidating the Peregrine group had proved to be a complex task, he said. 'There has been no precedent for the liquidation of such a financial group in Asia.'