The liquidation of failed Dunedin private investment company Hurricane House has taken an unusual twist with the tendering of a $1 million life insurance policy of bankrupted Auckland developer Pat Rippin.
Hurricane House was placed in liquidation in mid-February last year owing 25 creditors about $4.5 million with liquidators still targeting a 20c-in-the-dollar payout.
In April, Hurricane founder Paul Nicholson transferred ownership of three investment properties, understood to be collectively worth more than $500,000, to liquidators Insolvency Management Ltd, following several months of negotiation.
So far, about $120,000 in an interim dividend have been paid to creditors, about half of whom are from Dunedin and, in many cases, friends or family of Mr Nicholson.
Mr Rippin (68) has been involved in property development for more than 30 years.
He was bankrupted in August 2008 over a $250,0000 debt, the weekly National Business Review reported.
The Sovereign Assurance policy is being sold by tender by lawyers Kirkland Enright, who have estimated its policy surrender value will be $315,000 by October.
The buyer will have to maintain premium payments until Mr Rippin dies, before collecting the $1 million.
Insolvency Management liquidator Gus Jenkins said having the policy as a saleable asset "was very unusual".
He said Mr Rippon had a separate debt to a third party and the policy was formally assigned to that person, but the third party was also a guarantor for a "substantial" Hurricane House loan, and the policy was then assigned to the liquidators.
Mr Jenkins understood reports Mr Rippin had suffered a heart attack in May were correct.
Mr Jenkins said of the three properties transferred by Mr Nicholson in April, a holiday home in Twizel has been placed on the market for $195,000 while a Dunedin residential home and a bare West Coast section are expected to be put on the market later in the year.
Mr Jenkins said a $200,000 debt which was expected to be recovered and returned to Hurricane investors in April had not been repaid and legal proceedings had been started to recover it, but he remained confident it would be paid.
Hurricane's demise came about from an unsecured loan to a boutique Christchurch finance company.
Its major debt was a $4.5 million unsecured loan to Fendal Finance, itself later placed in liquidation owing $17.1 million.
The $4.5 million Fendal loan was revealed to southern investors to be unsecured, two weeks after Hurricane's collapse.
Fendal's collapse meant those investors stood behind Fendal's creditors for repayment.
