KEY POINTS:
In 1812 Napoleon forged on to Moscow firm in the view that his "Grand Army" was of a size and strength to withstand any conditions.
That cast-iron self-belief, crucial to his success, was also his undoing. The Russian winter was too cold and too long. His retreat evolved
into an epic human tragedy and history has not judged him kindly.
For some reason that analogy sprang to mind this week.
A year into one of the biggest financial and property sector meltdowns the world has seen since the Great Depression, Hanover Finance finds itself stranded.
Richard Long's ill-fated words - a size and strength to withstand any conditions - were ruled out of order by the Advertising Standards Authority (ASA) late last year. They always threatened to come back and haunt the finance company.
What is staggering is that as recently as last month the company was still fighting for the right to use those words.
Hanover's appeal against the ASA ruling was only thrown out on June 19.
If nothing else, that suggests the company's management really did believe they could forge through this winter of stormy economic conditions.
Almost nobody else in New Zealand's small financial community shared that belief.
With big loans still embedded in a collapsing property market, debenture re-investment rates plummeting and the credit crunch killing any hope of raising new capital, it is a wonder that Hanover even made it this far.
There are certainly plenty of sceptics wondering if they should have.
Both the Commerce Commission and the Securities Commission have now indicated they will investigate Hanover's business practices.
If it is proved correct that call centre staff were still under instruction to reassure investors and encourage reinvestment as late as last week, then that will be an issue.
Hanover's management are trying to paint this week's funds freeze and restructuring as a timely strategic withdrawal rather than a panicked retreat. But naturally many investors are fearing the worst.
With Bridgecorp investors now expecting to get back as little as 13c in the dollar, and Capital & Merchant investors as little as 8c in the dollar, it is not surprising there is a climate of fear.
It would be unfair to hurriedly throw Hanover into the same category as those earlier failures.
The company has yet to rule out the best-case scenario. In theory this remains a cashflow issue which could see investor funds returned in full when outstanding loans and other assets have been realised. Though it is looking hopelessly out of date, the company officially has a loan book of $749 million versus $564 million owed to investors.
But co-owner Mark Hotchin's own admission to the Herald that he may need to pump in cash to pay investors back suggests he is now being realistic about a likely shortfall in funds.
The big question is how wide will the gap between asset and debts be.
Hotchin and Eric Watson have accrued sizeable levels of personal wealth in the past decade - $200 million and $450 million respectively according to the NBR RichList.
So it is inevitable that they are now in the spotlight. The media scrutiny that this pair now face should not be driven by schadenfreude. It should not be founded on contempt for jet-set lifestyles and luxurious living.
It should be founded on the fact that Watson and Hotchin's wealth may now offer the best hope investors have for getting their money back.
Liam Dann is the Herald's business editor
