Hurricane House Ltd, a private investment and finance company since mid-2001, is solely owned by Dunedin businessman Paul Nicholson, who applied to have it placed in liquidation last month.
It is now in the hands of Dunedin-based Insolvency Management Ltd.
There are at least 25 mainly Dunedin investors caught up the liquidation, with outstanding capital of more than $5 million yet to be repaid, including to a wide range of professional people in the city.
Three of the 25 investors contacted the Otago Daily Times this week, with two confirming they borrowed money against the equity of their homes to invest in Hurricane, including another who put additional life-savings into the Hurricane investment.
One investor understood many of the loans were in the region of $350,000 to more than $800,000 against the homes, and at least one investor has since had to refinance to carry over the loan, or face losing the family home.
One investor said he put money into Hurricane on the understanding it was to be spread across four business, of which Mr Nicholson said he had control over.
However, more than 50% of Hurricane's loan portfolio is to a South Island finance company.
"I wasn't aware of the extent of money going into the finance company," he said.
A Canterbury-based finance company has about $4.5 million of Hurricane's investors' money and the company is in default on that loan. Lawyers are attempting to negotiate settlements on several Hurricane loans.
Hurricane formerly traded as Edinburgh Finance Ltd.
One investor was now paying interest-only weekly payments of up to $1000, in order to keep their home and await the outcome of the liquidation.
"I know of at least four people whose homes are on the block over this," said one investor, who asked not to be named.
All three investors were scathing of Mr Nicholson's management of investments, with several highlighting his purchases and subsequent trading-in of luxury cars, holidays and his personal spending habits.
The liquidators have stressed it is too early to say what payouts may be available to the more than 50 investors and creditors, but one scenario is an almost 60% deficit, meaning only $3.6 million of the $8.5 million may be available.
At this stage, Hurricane's bank, IRD and employees are expected to get money owed of about $370,000 and it is "likely" an unspecified dividend will be paid to unsecured creditors.
However, at the earliest, there will be no indication until a creditors' meeting is held in Dunedin on March 20 when other investors and creditors are given more details by the liquidators.
