Investors in the late Alan Hubbard's share vehicle Hubbard Management Funds will receive a repayment this month after legal wrangling over how to calculate the formula for distribution was resolved.

Grant Thornton were appointed as statutory manager of HMF in May 2010 and subsequently found significant discrepancies between assets held and statements issued to investors by Hubbard.

According to reports prepared by Grant Thornton, HMF was insolvent from March 2007, and when statutory managers were appointed, investors believed they were owed $80 million while actual assets on hand amounted to around $45m.

Given the discrepancy, Grant Thornton applied to the High Court for directions on how to distribute funds.

A $12m interim payment was made to investors in February 2012, and distribution calculations were finalised following a December hearing. The opportunity to appeal that decision expired on January 23.

A spokesman for Grant Thornton said: "The Court's decision was reached only after a huge effort by the statutory managers to work out who was due what. We've been working hard to get to the point where money can finally flow to investors."

The spokesman said the payment calculation ruling was not appealed and funds would now start being distributed to around 230 investors in February.

Investor liaison group spokesman Noel Macpherson said it was good news for investors who had been waiting for years to see their money back. "There is some surety to it now, and it's the start of the end process," he said.

Capital investments would be repaid first, but investors were told the process could take up to two years, he said.

Around 70 investors will not receive payments next month, after the High Court ruled they had effectively been overpaid when the February 2012 interim distribution was made. Final numbers in that category may change depending on the final assets realised, Grant Thornton said.

The court ruling "won't suit everybody", Macpherson said.

Of the options available to the court, "this was deemed to be the fairest to the majority.

"So I guess that's all you can ask for."

The next investors' update from the statutory managers will be a formal report mid-February.

- © Fairfax NZ News

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