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 pool 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 said. “It could take at least two years to repay the capital pool fully.”
Investors have until Jan. 23 to appeal the decision, and if an appeal is lodged, all distributions will be delayed until the action is resolved.
The court-ordered claw-back of overpayments in the interim distribution has been removed, and the statutory managers won’t seek repayments from investors, they said.
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.