Bankruptcy proceedings are being brought against former Dunedin businessman Gray Ussher, whose collapsed Christchurch-based finance company Fendal Finance owes Dunedin investors in failed Hurricane House Ltd $4.5 million.
In March, private investment and finance company Hurricane House, of Dunedin, owned by Paul Nicholson, was placed in voluntary liquidation by him. It owed almost $8.5 million to 50 mostly southern investors.
Its largest loan of $4.5 million was to Fendal - in highly unusual circumstances as an unsecured loan, other than a personal guarantee given by Mr Ussher.
Separately, Fendal was placed in voluntary liquidation in May by Mr Ussher, owing $17.1 million to at least 28 creditors with estimates at the time of a $10.5 million shortfall.
Insolvency Management Ltd liquidator Gus Jenkins, of Dunedin, said court proceedings had been initiated for an application to have Mr Ussher placed in bankruptcy, claiming the $4.5 million, through the High Court at Christchurch.
He was hopeful the personal guarantee of Mr Ussher could yet offer "some potential to settle before [bankruptcy] court", Mr Jenkins.
Following a recent briefing by Fendal's liquidators, Mr Jenkins understood there was a Dunedin property being put up for sale - although it had several mortgages over it.
The other major asset of Fendal Finance was a North Island house which had a debt of about $7 million to Fendal.
In the Canterbury high country near Castle Hill, there was also some subdividable bare land for sale, with no utilities in place, but a bank held the security over that asset, Mr Jenkins said.
"Everything is at a bit of a `wait and see' place at the moment," Mr Jenkins said of the asset sales and who had claims over proceeds.
He said he would be updating Hurricane investors on the Hurricane liquidation process shortly.
However, he said the Fendal liquidation and sale of assets could take three to four months to complete and assess for a pay-out potential. There was no scheduled announcement of the likelihood of a pay-out to Hurricane investors at this stage "so as not to get anyone's' hopes up", Mr Jenkins said.
