Jean Hubbard, the widow of late businessman Allan Hubbard, has made a surprise claim to the $60 million of disputed Aorangi Securities Ltd assets.
Statutory managers Grant Thornton are seeking confirmation from the High Court in Timaru as to whether assets introduced by Allan and Jean Hubbard were part of Aorangi.
Those assets, now valued at $60 million, could provide a substantial return to investors who have so far been paid $11.5 million, or 12c in the dollar, the managers said in a statement.
"For some time we have been seeking for the Hubbards to honour their promises and obligations. We are dismayed at Mrs Hubbard's decision, but remain committed to returning as many funds as possible to investors," the statutory managers said.
Before the death of failed South Canterbury Finance founder Mr Hubbard last September in a North Otago road accident, he faced 50 fraud charges laid by the Serious Fraud Office in relation to Aorangi Securities and Hubbard Management Fund, but they were subsequently dropped and the Hubbards were released from statutory management.
The managers said Mrs Hubbard's decision to dispute that position was delaying repayment to Aorangi investors.
"This is a major about-turn by Mrs Hubbard, and a considerable setback for investors," they said.
They claimed it was "contrary to public statements previously made by the Hubbards" that the assets were those of Aorangi and their personal interests in Aorangi would rank behind the interests of investors.
After transferring those assets to Aorangi, Mr Hubbard attempted to transfer them to several trusts and put loan arrangements in place between those trusts and Aorangi, the managers said.
"We deliberately unwound those subsequent transactions because, on our analysis, they were ineffective."
It has been reported about 34 separate entities were involved at one point with the Aorangi assets, some of which were defaulted loans or under dispute in some way.
In an April update, the managers said the Aorangi assets had a value originally ascribed by Mr Hubbard of $96 million, but then valued at $60 million.
The manner of introduction, through various entities in a range of capacities, was unconventional and the transfer of legal title of assets to Aorangi was not completed in most cases, the managers said at the time.
In early April, investors in the Hubbard Management Fund got their first interim payout from the managers, getting a total $9 million of $12 million agreed in a court hearing. The managers said in early June they were still reviewing a court decision on the Hubbard Management Fund and "the implications for investors, and the next steps".
• The statutory managers' 11th report on Aorangi is due shortly.
