Legal wrangling and months of delays lie ahead for already frustrated investors awaiting payouts from the Hubbard Management Fund and Aorangi Securities, which are under statutory management.
Allan and Jean Hubbard, the Hubbard Management Fund and Aorangi Securities and seven trusts were placed in statutory management by the Government in June last year.
The couple were released from management a month ago, following Mr Hubbard's death on September 2, in a motor accident near Oamaru.
The assets of Hubbard Management Fund were valued at $44.4 millon at the end of October while Aorangi Securities owes investors about $97 million.
Manager Grant Thornton's ninth report said the value of the investments in the Hubbard Management Fund as reported to investors in statements, prepared by Mr Hubbard as at March 31 2010, were "significantly greater than the value of the underlying investments at that time".
"With global volatility, the value of the investments has declined further," the report said.
The portfolio of investments set out in investor statements from Mr Hubbard may not, in fact, have been held by the Hubbard Management Fund on their behalf at that time.
"Transactions that were reported as having occurred in investor statements may not have occurred at all," the report said.
The managers are now asking the court to approve their proposed method of distributing the fund to each investor in the context of all of the issues being faced. A court hearing is expected to start in mid-2012.
"The situation we have uncovered does not appear to have been fully covered in previous case law," the report said.
By September, Aorangi investors had received 12c in the dollar, or about $11.5 million. Some investors had also received a wellbeing allowance; determined by a third party assessor.
Total asset realisations to date were about $34 million; less than the previously estimated $40 million, because of a dispute with a non-Hubbard shareholder in a large farm, the report said.
About $20 million is being held pending determination of ownership of the proceeds.
"We acknowledge the hardship that some are suffering, but we are moving as quickly as possible to both protect and return investments to investors in Aorangi," the report said.
"It is with regret that we will be unable to make further capital distributions to investors at this time and this position will be reassessed in mid-2012," the statutory managers said.
Separately, the managers were trying to collect various third party loans, but many of these were complex and have associated legal difficulties such as receiverships, liquidation applications, disputes and shareholding issues.
"We believe the realisation process will be significantly advanced over the next six months and certain sales are likely to be timed to coincide with the end of the dairy season in May or June next year," the managers said.
