A high Court case in May will determine whether more than 230
investors or the estate of the late financier Allan Hubbard
will get access to $60 million of disputed funds from private
investment company Aorangi Securities, run by Mr Hubbard and
his wife Jean.
If the High Court case in Timaru, starting on May 20, finds
in favour of the investors, they could get almost dollar for
dollar back on their investments, but if not, they will get
only about 35c in the dollar, which includes 15c in the
dollar already paid out - a potential total of just $34
The Aorangi fund was estimated to be worth $96 million, and,
along with a separately disputed Hubbard Management Fund,
were outside the Government's guarantee scheme which bailed
out investors in the $1.75 billion collapse of Mr Hubbard's
South Canterbury Finance.
It has been reported Mrs Hubbard was disputing the $60
million in that the assets in question were never transferred
to Aorangi's ownership, so were therefore due to Mr Hubbard's
Three week's ago, a report by former National Bank chairman
John Anderson concluded Mr Hubbard had misled investors in
his tangled affairs, The New Zealand Herald reported.
Mr Hubbard died in a car accident in September 2011.
Aorangi statutory manager Grant Thornton said yesterday in
its 13th report to investors its legal advisers believed its
''case is strong''; to successfully lay claim to the disputed
assets on behalf of investors.
''We have provided the High Court with affidavits which
outline Aorangi's history and our conclusions, based on the
evidence we have found, as to why assets were introduced in
2009 and 2010,'' the report said.
At the heart of the Aorangi case are multiple ''introduced
assets'', with 34 separate entities involved, which have an
estimated value of about $60 million.
Grant Thornton is under increasing pressure to get funds
released, with complaints lodged by investors with the
Minister of Commerce and Attorney-general in November.
Grant Thornton said that from April 2009 to March 2010, the
Hubbards introduced assets into Aorangi; in their personal
capacities, as trustees of various trusts, and as company
shareholders and directors.
''Those assets were in the form of shares and loans in
farm-owning companies, partnerships and commercial
entities,'' the report said.
Grant Thornton was optimistic investors ''could receive most
of their capital back subject to the May 20 [High] Court
decision going the way of investors''. To gain further
protection for Aorangi investors, Grant Thornton had also
asked the High Court to determine a ruling that the Hubbards
were only paid for the assets they introduced, after the
claims of investors had been met.
The manager had cashed up many investments, but there were
still some loans remaining to secure on behalf of investors,
including loans to Te Tua Charitable Trust and other South
Island farming interests''Negotiations or court actions to
recover the loans are well advanced,'' Grant Thornton said.
A fortnight ago about 300 investors in the separate, disputed
Hubbard Management Fund (HMF), which holds about $40 million
in assets, were told by Grant Thornton they would this month
begin receiving some payments. The HMF was once valued by Mr
Hubbard at $83 million, and now has had its fair value of
identified assets set at about $40 million by Grant Thornton,
Following a request by the ODT, Grant Thornton said late last
week that the last valuation undertaken, at August 31 last
year, valued the HMF portfolio, before allowances and the
interim distribution, at $46.6 million.
Investor payments so far totalled about $12 million, equating
to about 13.4c in the dollar, but some HMF investors might
not be entitled to further payments.
About 70 investors were unlikely to get any further payment
as the interim distribution they received in March 2012 had
exceeded their entitlement under the final distribution order
calculation, which came from a High Court hearing. But
neither would they face a claw-back of those funds released.
Grant Thornton said the lack of any legal appeal, which
lapsed as of January 23, had cleared the way for
distributions to HMF investors.