After its collapse, Western was thought to owe $6 million to creditors and in unsettled insurance claims, but by June, that had grown to $41 million in debts and a shortfall of about $8 million. In a recent receivership update, the debts have grown to $46 million - with an estimated $14.2 million shortfall.
It was confirmed yesterday a court hearing date had been set for November 3, to decide whether the estimated $34.2 million in reinsurance payments from overseas companies can be used to pay both Christchurch earthquake claimants and also other creditors owed money by Western.
Simon Thorn, of receiver Grant Thornton, in Christchurch, said when contacted yesterday he was "confident" the overseas reinsurers "would fulfill their obligations" and pay out funds to Western, but he stressed "it remains unknown how much and when" any payout would go ahead.
Incorporated in July 2002, Western had 15 staff in offices in Queenstown and Auckland, and its directors were Queenstown-based Graham Smolenski, and Jeff McNally, of Victoria, Australia.
Industry sources were stunned when it was revealed in June Western had been offering insurance cover worth a total of $10 billion around the world, including commercial property insurance around Canterbury covering $476 million.
In Mr Thorn's receivership update last month, he said he was continuing to try to recover "significant unremitted premiums" held by brokers since the receivership.
He maintained the cost of convening a creditors' meeting would be considerable, as creditors were "scattered throughout New Zealand and the wider Asia Pacific region" and had earlier advised claims were to have been notified to the receiver by this week.
In mid-April, Grant Thornton told policy holders it was unable to sell, transfer or reassign about 7000 Western policies and they had been cancelled. However, a preferred supplier agreement with Tower Insurance was offered as an option.
In mid-June, the Insurance Council of New Zealand's chief executive, Chris Ryan, confirmed Western had been rejected "two or three years ago" for council membership, but he declined to say why.
• In April 2002, the Australian Securities and Investment Commission (Asic) had the licence removed from Mr McNally's insurance broker service, Allied Asia, for not being registered, as claimed, with the Australian Prudential Regulation Authority, and Asic also issued other consumer warnings about the company's practices.
Western Pacific became an incorporated company three months later and Mr McNally, who is Mr Smolenski's brother-in-law, became one of its directors in July 2003.
