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Jean Hubbard is opposing a transfer of assets worth $60 million to the statutory managers of Aorangi Securities.
Grant Thornton is seeking a High Court order for the transfer of assets, after they were pledged to the company by the late Allan Hubbard and his wife in early 2009 or early 2010.
Hubbard investment vehicles Aorangi Securities and Hubbard Management Funds were put into statutory management in June 2010.
In a statement early last night, Grant Thornton says they are "dismayed" at Mrs Hubbard's decision but remain committed to returning as many funds to investors as possible.
“This is a major about turn by Mrs Hubbard, and a considerable setback for investors. It is contrary to public statements previously made by the Hubbards that these assets are assets of Aorangi and that their personal interests in Aorangi would rank behind the interests of investors,” the statement says.
“If our claim is unsuccessful, we may need to look for other avenues of recovery to ensure a suitable return to investors.”
So far, investors have received 12 cents in the dollar, or around $11.5 million, of their capital back. Grant Thornton warns Mrs Hubbard's decision to fight their legal action will further delay repayments to investors.
“After transferring these assets to Aorangi, Mr Hubbard subsequently attempted to transfer the same assets to several trusts and put loan arrangements in place between those trusts and Aorangi.
"We deliberately unwound those subsequent transactions because on our analysis they were ineffective,” Grant Thornton says.