Banks tire of waiting for insurers
The claims for about 183 Canterbury customers of the failed Western Pacific Insurance are proceeding at a glacial place.
Only $3.3 million of claims have been submitted to reinsurers three years after the company's collapse, the latest liquidators' report indicates.
The liquidators, David Ruscoe and Richard Simpson from Grant Thornton, have received $48.3 million of claims for the September and February earthquakes and have almost $34m of reinsurance money available.
They say the assessing of claims is slower than hoped because of the lack of engineers in Christchurch.
Christchurch claimant, Lisle Hood, a property investor behind the former Poplar Lane entertainment precinct said "glaciers move faster".
The liquidators were hampered by a lack of funds in assessing and quantifying the claims.
"It's not only us. It's a whole lot of people," Hood said.
The long wait for payment had forced the liquidation of two of his and other investors property companies. ANZ Bank was not prepared to wait any longer.
Western Pacific Insurance was owned by Jeff and Adele McNally and by Queenstown businessman Graham Smolenski and collapsed under the weight of earthquake claims in April 2011.
The $34m of reinsurance money must go to the Canterbury claimants, the High Court rules in late 2011.
Hood doubted any claimant had received a payment.
He and Jon Webb were directors and shareholders of Business Building Systems and Ourway and had bought in other mostly local investors in those companies for the Poplar Lane developments.
They were the largest claimant of Western pacific with several properties damaged by the quakes.
He expected the liquidators would have to apportion the reinsurance money between claimants. "We are in limbo until this gets resolved, as are our banks."
Their main lender was Kiwibank and it was "losing its appetite for the wait".
BBS and Ourway had put their properties on the market so they could clear the bank loans.
"The difficult thing really is the Government through Cera (Canterbury Earthquake Recovery Authority) and CCDU (Christchurch Central Development Unit) have created so much uncertainty it's very difficult to get people interested in the properties."
Most of the properties were in the designated Innovation Precinct but investors did not want their investment to be controlled by Government.
Liquidators had indicated a bit of a shortfall for claimants of the September quake and a bigger shortfall for February 22. "We know we are not going to get the full amount we are entitled to," Hood said. He understood the liquidators were able to get some money from a reinsurer for one of the claims and use the funds to hire assessors for other claims.
"I know of others that are in the same position, they are just waiting like we are."
Hood said the Government had bailed out AMI Insurance and that would cost taxpayers "hundreds of millions of dollars" but it had rejected help for Western Pacific which would have cost about $30m and sorted out a lot of businesses and lives.
"The Government rejected the whole idea. I think that was irresponsible of them really," Hood said.
The liquidators said in their latest update that one firm of engineers was talking with them to discuss ways of increasing the number of claims they could handle. Claims submitted to date had a combined value of $3.3m.
They were continuing to collect unpaid premiums from brokers and were expected to put $600,000 of those claims before the courts in the next three weeks.
Three months ago the liquidators reported they had used the funds received from one of the reinsurers to advance claims. Loss adjusters were examining 60 claims with a total estimated value of $37m.
The liquidators were unable to be contacted on Friday.