More than $1 million is likely to be available to creditors of failed private-investment company Hurricane House, including three southern investment properties of company founder Paul Nicholson, of Dunedin.
Also under negotiation, potentially as an asset, is a current $1 million life-insurance policy, plus separate court action against an Auckland valuation company.
Hurricane was placed in liquidation in mid-February last year owing 25 creditors, half of whom were from Dunedin, about $4.5 million. Dunedin-based Insolvency Management Ltd targeted a return of 20c in the dollar after asset sales.
Creditors and investors were recently sent a six-monthly liquidator's report and letter of explanation, outlining $500,000 was to repaid, in three tranches, from a loan to a North Island person, plus the transference by Mr Nicholson of three investment properties to the liquidators recently, after several months of negotiation.
The properties are a residential investment in Dunedin, a holiday home in Twizel, and shares in a company that owns a bare section on the West Coast. The properties have not been valued, but are understood to be worth more than $500,000 collectively.
When contacted earlier this week, Gus Jenkins, of Insolvency Management, confirmed details of the information sent recently to creditors.
"We are starting to make progress on [getting some repayment from] distressed loans. People do not realise we are fighting everyone else [creditors from other actions] to get some money from these people," Mr Jenkins said of the more than 12-month liquidation process so far.
Much of the capital tied up with Hurricane investments and loans, which was promoted to a small circle of friends, family and other investors by Mr Nicholson, included the use of family homes as collateral to raise investment funds.
It was understood possibly one home had been lost because of the Hurricane House liquidation, but many investors had lost some, or a large part, of their life savings, some sources have said.
Mr Jenkins said of the $500,000 from the northern distressed loan, payment of $150,000 had been received, $250,000 was due shortly and the $100,000 balance was due early in 2011.
Of the $4.2 million owed to creditors, a 20c in the dollar payout equates to a total $840,000 return. Creditors were paid 2.7c in the dollar in December, totaling $120,000, and payment of a 3c-4c interim that was postponed until later this month should total about $200,000.
Hurricane's major debt was a $4.5 million unsecured loan to Christchurch boutique finance company 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 about two months later meant those investors stood behind Fendal's creditors for repayment.
Mr Jenkins said many debtors who owed Hurricane's liquidators repayments on loans were in financial stress, and in some cases negotiated settlement of even just partial debt collection could take 18 months.
He said it was unusual a life-insurance policy was part of asset claims. He was looking at how that might be realised as an asset.
He noted legal action was also under way in Auckland, with a valuation company that had supplied information for which Hurricane then offered mortgage funding. Commercial sensitivity prevented saying more about what that legal action might entail.
