Settlement between Jean Hubbard and statutory manager Grant Thornton pre-empts High Court action.
Jean Hubbard has done the honourable thing and made sure that Aorangi Securities investors will get back as much as possible of the capital they invested in her late husband Allan Hubbard's company.
As a result of the settlement Mrs Hubbard has made with Grant Thornton, High Court action between the statutory manager of the Hubbard companies (those outside the South Canterbury Finance nexus) and herself has been withdrawn.
Grant Thornton said late last week that most, if not all, of the Aorangi investors' capital would be returned over time.
It is surprising this was ever in question.
The statement said the process would involve the co-operative realisation of assets, some of which are due to settle next month.
Investors' capital will be repaid progressively as funds become available.
Mrs Hubbard could have fought the High Court action (effectively against the Hubbard estate) to the bitter end.
It's notable that some Auckland-based financial players had earlier suggested she do just that, so incensed were they by the way the Hubbards had been treated by the Crown - aka the Government - before Allan Hubbard's death in a car accident.
They also believed the Hubbard estate should not have been entirely cleaned out, and that statutory management had resulted in some assets being realised too quickly at a time when values were down.
A better result - including something over for Mrs Hubbard to pay some bills and the Hubbard family itself - would be achieved if more time was taken for the sell-down. The terms of the settlement are confidential.
But, it is a fair assumption that some financial assets will be left over for the Hubbard family - particularly Jean Hubbard.
This is unlikely to amount to a major sum.
The fact that the matter ever got to court is a lesson in incompetence.
Allan Hubbard had put $60 million of assets into trusts in 2010 (Aorangi investors were to be the beneficiaries) to make up for a shortfall in the company and prepare the way to issuing a complying prospectus.
The commercial authorities had told him to tidy up his affairs after an investor made a complaint.
Statutory management was imposed before Hubbard completed the transaction.
Grant Thornton subsequently unwound the transactions.
But Hubbard's untimely death meant the process of transferring the various Hubbard family assets back (to ensure his wishes that his family's assets were subordinated to the investors) had not been finalised before his death.
And in December, Grant Thornton said Jean Hubbard was "personally contesting" Aorangi's ownership of the $60 million of assets.
She wanted to keep the assets, which was holding up the return of the funds.
That led to the High Court action.
Hubbard allies blame Grant Thornton for the predicament ever occurring and are angry that the whole issue was not settled by negotiation in Allan Hubbard's lifetime.
Before his death, Allan Hubbard's own mental state had been seriously impaired by the strain he was under. He had become prone to anger and had talked about ending it by simply stopping his dialysis.
Jean Hubbard was the mainstay.
It's not as if Hubbard had left anyone in any doubt of his own intentions - least of all the investors.
He wrote to Aorangi Securities investors after statutory management was instituted. His handwritten note - in a rather large scrawl - was labelled strictly confidential.
Hubbard made the point he had operated Aorangi as a "mortgage company" for more than 30 years, and during the entire period interest had been paid quarterly, clients had suffered no loss of capital and had had capital returned promptly.
He presented a back-of-the-envelope calculation (he had been kicked out of South Canterbury's Timaru office) that said there were loans of $128 million, investors had put in $88 million capital and the Hubbard family had subordinated their interest ($40 million) to that of the investors.
"The $40 million surplus belongs to myself and family, and all our equity has been subordinated to client interests; ie, the Hubbard family stands any loss before clients do," wrote Hubbard.
He went on to make the point that the Crown had appointed statutory managers whose job was to realise the loans and repay capital. But that would take time because it was not possible for borrowers to repay at short notice.
As indeed has proved to be the case.
His figures were off-base. But the intention was clear.
Hubbard was not a saint. He had little tolerance for the usual rules of good governance.
I got to talk with him a bit before his death.
Stories he related of how he and the late Howard Paterson (they were shareholders in Dairy Holdings among other ventures) used to quickly agree on agenda points - that's when there was a written agenda - and get down to deal-making were pricelessly anarchic.
He was a canny investor and when the chips were down was prepared to tip in his own investments so investors in both Aorangi Securities and Hubbard Management Fund do stand to get back the face value of the capital they invested.
Many investors in finance companies over the past 10 years or so would be cock-a-hoop if they could say the same.
He was a soft touch for younger Auckland businesspeople with large ambitions who used to refer to him as "Mother", as in Mother Hubbard, but dropped him when they found the cupboard was bare in the wake of the GFC.
There is one issue that still concerns me.
The statutory management took a surreal twist when Grant Thornton found 72 boxes of crucial documents two weeks ahead of when the pivotal court case to determine whether investors - or Hubbard's widow, Jean - retained ownership of $60 million in contested assets was initially due to go ahead.
Grant Thornton has never fronted up publicly with a satisfactory explanation of how the documents had got lost.
It's high time they did.