The Hubbards' 400 Aorangi Securities investors are to receive a further three cents in the dollar next week, bringing their repayments to $14.4 million.
The latest statutory managers report released yesterday to the investors, owed $96m, stressed that the outcome of High Court action to secure $60m of assets originally promised to the investors by the Hubbards would dramatically affect their returns. Managers estimate they will be able to recover $39m from the assets they control.
If the money is recovered investors will get back close to 100 per cent of their capital back, compared to 40 per cent if they don't.
The latest payout will mean investors have received 15 cents in the dollar of their capital back. So far $11.5m has been paid back to investors (12 cents in the dollar), and $4.8m has been charged by the statutory manager's firm, Grant Thornton, to administer the fund.
Aorangi was placed into statutory management by the Government on June 20, 2010, along with Allan and Jean Hubbard. It followed Mr Hubbard placing $60m worth of assets into charitable trusts for the benefit of Aorangi investors to raise the capital to meet the request of the Securities Commission to issue a prospectus.
The appointed statutory managers reversed the transactions, putting the $60m back in the Hubbards' control, and the statutory managers are now having to fight in court to get it back for the benefit of investors.
"In the past Mr and Mrs Hubbard have always said that these introduced assets were part of Aorangi, now this has changed with Mrs Hubbard personally, and as executrix of her late husband's estate, now disputing this position. This is a major about-turn," the report stated.
"Should we fail in these proceedings this will have a severe impact on returns to Aorangi investors and we may need to look for other avenues of recovery to ensure a suitable return to investors."
The disputed $60m covers 34 different entities' holdings in farms.
A preliminarily hearing was held in the High Court in Timaru on Monday last week, where Mrs Hubbard's lawyer clarified that she would contest the $60m.
Aorangi investors are owed $23m by the Te Tua Charitable Trust. So far $6m has been recovered by the managers.
"One interest-free loan of $1.2m was due for repayment on 1 June, 2012. We are very disappointed the borrower has chosen to ignore the agreed repayment date, despite a number of reminders.
"One borrower with a loan balance of over $3m was due to settle in 2014. They have proposed to bring their settlement date forward to July 2012. These funds are subject to a claim by another party so will be placed in a separate account until ownership is determined."
The next report is due at the end of September.
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