Friday 2nd August 2013
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The cost of administering the frozen funds of late businessman Allan Hubbard has topped $17 million, of which almost a third was hoovered up in legal fees.
Since the Hubbard entities were put into statutory management in 2010, Grant Thornton's Richard Simpson, Trevor Thornton and Graeme McGlinn have racked up $1.4 million overseeing the administration of Te Tue Charitable Trust, $6.6 million for Hubbard Management Fund and $9 million for Aorangi Securities, according to their latest reports.
Of that, legal fees make up $3.3 million for the Aorangi administration, $1.7 million for HMF, and $410,000 for Te Tua in what's often been an acrimonious battle between the government appointed managers and Hubbard's widow and estate executor, Jean Hubbard.
Investors in Aorangi received another payment of 5 cents in the dollar, taking the total so far to $33.7 million, or 35 cents. They are expected to get all of their $96 million back after the statutory managers cut a deal with Jean Hubbard in May over disputed assets.
HMF investors also got a return of 5 cents in the dollar, and have been repaid 45 cents, or $18.1 million. About two-thirds of the 300 investors in the fund will get all of their capital returned after a court determined how investors would be repaid in December, and the manager will decide how to distribute any surplus once the initial pool is settled.
The statutory managers have written off $13 million from the Te Tua loan book since their appointment in 2010, and as at June 30 it had a closing balance of $11.5 million with a $9 million provision for further write-downs hanging over its head.
Former Commerce Minister Simon Power appointed the statutory managers of various Hubbard entities, though controversially left out Allan Hubbard's primary entity, South Canterbury Finance.
SCF ultimately cost the taxpayer an upfront bill of $1.7 billion when it failed and called on a government deposit guarantee scheme created to protect investors during a spate of finance company collapses in the late 2000s. Former directors and executives of SCF will stand trial for an alleged fraud at the lender next year.
Hubbard died in a car crash in 2011 facing fraud charges relating to his management of Aorangi.
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