Dunedin liquidators are proceeding with a bankruptcy application against former Dunedin businessman Gray Ussher, who gave a personal guarantee to Hurricane House investors for a $4.5 million loan to his since-failed finance company.
Mr Ussher placed Christchurch-based Fendal Finance in voluntary liquidation in May, owing $17.1 million to at least 28 creditors with estimates at the time of a $10.5 million shortfall - of which the $4.5 million debt to Dunedin-based Hurricane House investors was the largest.
Hurricane House, a private investment and finance company owned by Paul Nicholson, was placed in voluntary liquidation by him in March, owing almost $8.5 million to 50 mostly southern investors.
Insolvency Management Ltd liquidator Gus Jenkins, of Dunedin, yesterday said the first hearing of the bankruptcy proceedings against Mr Ussher was set down for August 31 in the High Court in Christchurch.
The $4.5 million loan was exceptional in that no securities were held over the loan, other than Mr Ussher having given a personal guarantee on the loan.
Liquidators had been talking to Mr Ussher about the guarantee since Fendal was placed in liquidation, however, Mr Jenkins could only say yesterday he was "still in discussions" with Mr Ussher over having guaranteed the debt.
Mr Ussher, once a Dunedin-based finance company director, had been operating Fendal Finance in Christchurch since its incorporation in January 1998.
Fendal was a second-tier financier of both residential and commercial borrowers.
Its liquidators have said it failed due to the high proportion of writedowns for its portfolio size and because distressed loans owed to it had affected Fendal's ability to pay its own debts on time.
Similarly, Hurricane was placed in liquidation because it had several large loans defaults.
