Some investors in the beleaguered Hubbard Management Fund
(HMF) may get less than 50% of their investment back,
according to statutory managers Grant Thornton.
The HMF fund was a private investment company of the late
Timaru financier Allan Hubbard and, unlike his failed South
Canterbury Finance which came under a government guarantee
and returned $1.75 billion to investors and lenders, HMF's
assets were frozen in 2010 and are to be sold off by Grant
Thornton and payments made over several years to investors.
Similarly but separately, investors in Mr Hubbard's private
Aorangi Securities have faced asset devaluation and have
court battles ahead to determine ownership of $60 million of
assets claimed by Mr Hubbard's widow, Jean.
While Mr Hubbard once valued HMF at $83 million, Grant
Thornton initially said that was overstated and it was worth
$60 million, but subsequent cash shortages, costs,
financiers' and Hubbard family claims and market movements
wiped off a further $17.5 million - eroding HMF's value to
about $40.5 million.
Grants Thornton said HMF's gross value in July 2010 was
estimated at $70 million, before forensic accountants looked
at it. Then by June it was down to $54.5 million and by
August this year it was assessed at $46.6 million.
The Otago Daily Times asked Grant Thornton to clarify
estimates of possible payouts in the dollar, given the
complexity of claimed overstatements and what may be actual
A Grant Thornton spokesman said that if an average weight was
carried across all investors, they would get ''around 50c in
''However, each investor is different and it cannot be
guaranteed they'll get half each,'' the spokesman said in a
Grant Thornton was now working out the details, and ''hope to
be in a position to make more figures public late next
week'', the spokesman said.
This week, Grant Thornton told investors they would not have
any of inaugural payments, in total $12 million, ''clawed
back'' by court order, and outlined how further payments
would first come under a ''capital pool'' for payments,
followed by a ''surplus pool'' payout.
The capital pool is the amount required to repay all
investors their original investment.
As directed by the High Court, capital gains, interest and
dividends which were reported on investor statements would
not be considered as part of the capital pool.
The surplus pool is the amount available from asset sales
after all capital amounts due have been paid and is allocated
according to a court-approved formula.
Of the assets of Aorangi Securities, which Mr Hubbard once
valued at $96 million before scaling them down, there is $60
million now at stake. Investors in Aorangi Securities have so
far received 15c in the dollar.
Mrs Hubbard has made a claim on that $60 million, saying the
assets were never transferred to Aorangi's ownership and
therefore are part of her late husband's estate, which would
probably wipe out further payments to Aorangi investors.
Critics have been scathing of Grant Thornton, after its
discovery of dozens of boxes of documents relating to the
case prompted the court date with Mrs Hubbard to be shifted
from last October to May 20 next year.
About 230 investors in an investor liaison group last month
laid a complaint with the attorney-general and minister of
commerce over Grant Thornton's performance since being
appointed in June 2010.