Three years after its multimillion-dollar collapse, the
liquidation of boutique Queenstown insurance company Western
Pacific Insurance appears set to drag on for at least another
About $50 million to $60 million of insurance claims are
outstanding and unsecured creditors have lost almost $17
While Western offered 7000 policy-holders around the world
insurance cover amounting to $10 billion, it was put in
liquidation in April 2011 when it was unable to pay just $6
million in Canterbury earthquake claims - a figure which at
one point spiralled up to more than $60 million in claims.
Western was placed in liquidation by its owners, Queenstown
businessman Graham Smolenski and his brother in law, Jeff
McNally. Grant Thornton NZ was appointed liquidator.
In the latest six-monthly report, joint liquidator David
Ruscoe said it was not yet practicable to estimate a
completion date and it was likely to take until at least
2016, because of the large amount of work ahead in assessing
and agreeing on the Canterbury claims, and in recovering
money from the reinsurers of the claims.
Loss adjusters are working on about 60 insurance claims,
estimated to be worth about $37 million, and the liquidators
had received ''preliminary reports'' on a further 20 claims,
''Distributions to Canterbury policy holders will occur after
all the earthquake claims have been quantified and agreed,''
Mr Ruscoe said.
It was estimated claims from the Canterbury earthquakes
totalled $48.3 million, which suggested a shortfall of at
least $11 million, based on the liquidator's $37 million
estimate for 60 of at least 80 claims.
However, there appeared to be no chance of of the many
unsecured creditors seeing any of the total $16.9 million of
Mr Ruscoe said it ''appears unlikely'' there will be any
dividend available for unsecured creditors.
The unsecured creditors include insurance claimants owed $15
million, trade creditors owed $1.1 million and $740,000 of
Also outstanding for Grant Thornton is more than $600,000 in
premiums which were being held by ''various'' insurance
brokers, for which the liquidators are having to submit
claims through the courts.
A 2012 court case determined the reinsurance payouts would go
to the Christchurch earthquake victims, as opposed to being
paid to any other insured parties and creditors.
The list of Western's 24 reinsurers used during 2010-11
included three Lloyd's syndicates as well as companies based
in Sweden, Barbados, Singapore, India, Australia and
In 2011, Grant Thornton noted Western Pacific had accepted
risks ''outside the scope of its reinsurance policies'' and
''in some instances, premiums were too low''.
Western was able to operate with just a $500,000 bond lodged
with Perpetual Trustees, and the potential liabilities of
more than $10 billion included policies offered in Australia,
Chile, Abu Dhabi and Pacific Island countries.
Western had applied for membership of the Insurance Council
of New Zealand several years ago, but was rejected, although
the council declined to say why.