Some investors stung badly by the $4.2 million collapse of private Dunedin investment company Hurricane House are backing its former owner Paul Nicholson to re-enter the property market to recoup some losses for them.
New emails to would-be investors have been leaked to the Otago Daily Times, outlining Mr Nicholson's offer further, addressed to "close associate and habitual investor" and soliciting funds.
About 25 Hurricane House investors, mainly southern-based friends and family, were owed about $4.2 million after Mr Nicholson lent $4.5 million unsecured to a Christchurch finance company which was subsequently placed in liquidation itself owing about $17 million.
Following recent disclosures of Mr Nicholson's intentions to resume property investment and solicit funds, three former Hurricane investors contacted the ODT this week, saying he was "just trying to pay money back" and they retained their "faith in his ability".
"You are destroying any opportunity [for investors] to get money back," one investor said of making public Mr Nicholson's attempts to solicit funding.
The three are estimated to have lost close to $1 million from a combination of Hurricane, refinancing and interest costs.
The investors, like those who have been critical of Mr Nicholson recently, wanted to remain anonymous. One is an Otago-based man, who lost a large six-figure sum in the Hurricane debacle and "almost lost the family home".
Both disaffected and supportive former Hurricane investors have separately recounted returns from earlier Hurricane investments in commercial properties in the region of 15% to 20%, with one supportive investor reasoning Mr Nicholson's "track record in commercial real estate" should allow him to "get funds to stimulate a [new property] portfolio".
"He wants to repay investors. That's a very rare thing to do ... he has no legal obligation to repay them but morally wants to," he said.
While the other former Hurricane investor describes the $4.5 million unsecured finance company loan as a "gross mistake", he, too, was adamant Mr Nicholson should be supported "to go back to his knitting, which is commercial property".
On the question of Mr Nicholson having lent $4.5 million unsecured to a finance company, the other investor conceded it was "absolutely ridiculous and unbelievable", but Mr Nicholson would have "learnt his lesson" from that.
On Mr Nicholson's decision to contact some former Hurricane investors for funds, the investor said it was a "bad call" as some "may not be over him".
The investor was "not concerned" Mr Nicholson's April email to some investors, which included a comprehensive CV and business profile, did not make any mention of Hurricane House, its liquidation or money owed.
"You look at the deal [being proffered], not the person," the investor said.
Other emails obtained of Mr Nicholson's, which were sent in late-April, asked "commerce guys/gals help with all or part?", by 2pm that day, and another asked "Urgent. Thanks. I need $500,000 today [20% return] due to another party funding delay".
• While Hurricane liquidators strive to build on the 12.5c in the dollar repaid to investors so far, Mr Nicholson recently set up a new investment company, Bendemeer Trustees Ltd, and has been soliciting new and former investors for funds.
Mr Nicholson has said he has paid a $1.2 million deposit for a $12 million Queenstown subdivision, which is in receivership, which he said was valued in April at $20 million.
