BUSINESSDESK: Investors in Strategic Finance this month got paid another 1.5 cents in every dollar they had put into the failed lender and are still facing a best-case scenario of clawing back 26% of their principal, says the latest receiver's report.

Some 10,000 investors owed $367.8 million have been paid 8.5 cents in the dollar, or $31.3 million, of their principal, and receivers John Fisk and Colin McCloy of PwC have kept their forecast recovery of between 12% and 26% in their latest update on the failed finance company.

Between September 11 and March 12 the receivers recorded $2.1 million in receipts from the loan book, taking total recoveries to about $31 million.

"We iterate that realising property in the New Zealand market remains challenging and on a number of the loans, secured over property, it is difficult to assess the level of recovery," the report said.

"This is particularly so for development and coastal properties, of which SFL [Strategic Finance] is heavily exposed."

In March, the Financial Markets Authority said it had dropped its investigation into the late Jock Hobbs, a former All Black and Strategic Finance director, after the extent of his cancer was made apparent to it.

At the time, the market watchdog was still looking at the failed lender and has yet to decide whether to lay charges.

The receivers have launched marketing campaigns for property in Gulf Harbour, Fiji and Northland, where Strategic holds loans over the sites, and is likely to recover funds from any sale.

They are also undertaking remedial work or securing resource consents on property in Northland, Australia and the Coromandel before putting the lots to market.

Strategic’s transactions came under scrutiny in December 2009 when former ACT Party MP and former associate commerce minister John Boscawen told the Parliament the finance company misrepresented about $68 million worth of debt which it classified as second mortgages when they were effectively a third-ranking security.

The receiver said it has concerns over "several transactions undertaken during February 2007 to August 2008" and is assessing whether to proceed with legal action.

The finance company was put in receivership in March 2010 after missing a milestone repayment, ending a moratorium arrangement that had been in place since the end of 2008.

It had tried to get out of trouble in a Hanover-style debt-for-equity swap with South Canterbury Finance that would have given Strategic investors a mix of SCF debentures, shares and preference shares, but Perpetual Trust chose to call in the receivers instead.