Hubbard U-turn disappoints Aorangi Statutory Managers

Hubbard U-turn disappoints Aorangi Statutory Managers

25 June 2012 Media Release

Statutory managers, Grant Thornton New Zealand, have expressed their disappointment at the announcement by Mrs Jean Hubbard that she will oppose the transfer of assets to Aorangi investors.

“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,” said the statutory managers from Grant Thornton.

The statutory managers are seeking confirmation from the High Court in Timaru as to whether assets introduced by the Hubbards were part of Aorangi. These assets, currently valued at $60 million, would provide a substantial return to investors.

However, Mrs Hubbard has decided to personally dispute this position, holding up repayment to investors.

Mr and Mrs Hubbard had always said the introduced assets were part of Aorangi.

The late Mr Hubbard quoted to one Aorangi investor: “You will never lose the capital as I would first of all have to lose $50 million.”

“This is a major about turn by Mrs Hubbard, and a considerable setback for investors. It is contrary to public statements previously made by the Hubbards that these assets are assets of Aorangi and that their personal interests in Aorangi would rank behind the interests of investors,” the statutory managers said.

“If our claim is unsuccessful, we may need to look for other avenues of recovery to ensure a suitable return to investors,” they said.

“After transferring these assets to Aorangi Mr Hubbard subsequently attempted to transfer the same assets to several trusts and put loan arrangements in place between those trusts and Aorangi. We deliberately unwound those subsequent transactions because on our analysis they were ineffective.”

So far, investors have received 12 cents in the dollar, or around $11.5 million, of their capital back. The legal action undertaken by Mrs Hubbard will, if successful, make a material difference to the amount that is repaid to them, Grant Thornton said.

The Statutory Managers will continue to engage with representatives of Mrs Hubbard as her and her late husband's affairs are intermingled with those of Aorangi.

The Eleventh Statutory Managers report is due shortly.
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