Hubbard investors set for distributions early 2013 after court ruling

Investors in Hubbard Management Funds are likely to get their initial distributions in the first three months of next year after the High Court settled on how to split the funds.

Justice Lester Chisholm has directed statutory managers Trevor Thornton, Richard Simpson and Graeme McGlinn of Grant Thornton to split HMF into two pools, the first being the principal amount owed to investors, excluding capital gains, interest and dividends that were reported on investor statements.

The second is the amount available from the sale of the fund's assets based on a formula set by the court, according to a statement by the statutory managers. Once the capital pool is repaid, the surplus pool payments can be made.

"We will not sell assets on a 'fire sale' basis. We need to maximise the recovery for investors," the statutory managers say. "It could take at least two years to repay the capital pool fully."

Investors have until January 23 to appeal the decision, and if an appeal is lodged, all distributions will be delayed until the action is resolved.

The court-ordered clawback of over-payments in the interim distribution has been removed and the statutory managers will not seek repayments from investors, they say.

Former Commerce Minister Simon Power appointed the statutory managers of deceased Timaru financier Allan Hubbard and his wife Jean, and various entities, in mid-2010.

The HMF entity emerged from their investigations into Aorangi Securities, another Hubbard vehicle.

The appointment controversially left out Hubbard's primary entity, South Canterbury Finance, which ultimately cost the taxpayer an upfront bill of $1.7 billion when it failed and called on the government deposit guarantee scheme.

(BusinessDesk)

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8 Comments & Questions

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"We will not sell assets on a 'fire sale' basis."
Bill English said the exact same thing about SCF.
In his own words... "There will be no fire sale of assets..."
(Go to the following youtube clip at 9 mins 26 seconds for confirmation) https://www.youtube.com/watch?v=jra6rk5eMKc

Same old scam, hidden in plain sight...

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None of this rubbish and grief would have happened but for the way Hubbard ran SCF and HFM.

End of story.

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You are correct. All this stuff about the administrators, etc, feathering their nests is just chaff. The fact remains that this disaster was caused by one man and one man alone. All fingers should be pointed at him.

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There should be offers sought for asset purchases immediately, discounted by say $5,000,000, which is what the stat managers will charge over two years. The reality is the stat managers' business model requires them to play a long game to earn fees.

It would be cheaper if this whole mess was thrown into the new entity Crown Asset Management Limited, which was set up primarily to liquidate SCF's distressed assets and save receiver fees of McGrath Nicol. It will be very interesting if the stat managers can get anywhere close to fair value for AJH's mess as McGrath Nicol certainly didn't for SCF.

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If they do not do it who will? The investors would not have a clue where to start or how to produce a fair outcome if it was in their hands.

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Can't blame the receivers for wanting to make repeat reurns to the buffet table.

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How interesting it will be to see what is discovered when the statutory managers go through such a large number of boxes of files. All the Hubbard entities were so intermingled that all the directors and officers of those entities will be praying their names don't appear on anything the SFO will be interested in, particulary with the SCF hearing approaching. If the SFO is alert it will already be in touch with Thornton.

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Think it's about time we started to have a real good look at certain accountants and their sloppy conduct in handling receiverships. Make the accountants accountable!

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