Hubbard receivers take fight to court

The 400 investors in the late Allan Hubbard's Aorangi Securities may have to wait ''some time'' for any more payments, statutory managers said today as they prepare to fight in court for $60 million of assets.

The investors have received 12 cents in the dollar of the $96m owed. The $96m of assets are now valued at $60m.

Grant Thornton, the firm appointed in June 2010 as the statutory manager of Aorangi Securities, the Hubbard Management Fund, the Hubbards' finances and those of several charitable trusts, said it had to take court action to argue that Aorangi investors owned the $60m of assets.

"This legal action, should we be successful on behalf of investors, will make a material difference to the amount that is paid out to them," Grant Thornton said.

"These assets, with a value originally ascribed by Mr Hubbard of $96m but currently valued at $60m, were introduced into Aorangi by Mr and Mrs Hubbard through various entities in a range of capacities.

"The manner of introduction was unconventional and the transfer of legal title of assets to Aorangi was not completed in most cases.

"This is a complex situation and a lot is at stake for investors.

"We need the High Court to determine that these assets are legally owned by Aorangi. Unfortunately, due to the court's heavy schedule, the hearing is not expected to take place this calendar year.''

Grant Thornton had so far distributed $11.5m, or 12c in the dollar, to investors.

It said that as further distributions were dependent on the court action and other loan-recovery actions, it might be some time before a further payment could be made to investors.

It said $36m had been realised and $20m was being held pending determination of ownership of the monies. 

There was $39m of third-party loans, some of which had already been realised. The $39m included realisations of Te Tua Charitable Trust loans, but other recoveries depended on the outcome of legal action.

Aorangi, which invested mainly in farms, had an investment of about $25m in Te Tua Charitable Trust, which was administered by the Hubbards.

Of that, $4.9m had been recovered, but $11.5m might not be able to be collected.

Because many of the loans were "last resort" loans, recovery would take time and there were likely to be substantial losses.

The Press