Debenture investors on Tuesday voted 93% in favour of Hanover Finance's debt restructure plan that will see Mark Hotchin and Eric Watson's Axis Holdings contribute up to NZ$40 million worth of property assets to Hanover to back up its plans to repay 100% of capital over 5 years.

But that NZ$40 million of property, which includes Axis-owned sections at Jacks Point in Queenstown and Matarangi Beach Estates in the Coromandel, is still encumbered by a NZ$21 million first mortgage from BNZ and another first mortgage from HSBC. The transfer of those assets has yet to be approved by those banks. Whether that approval is necessary or unlikely is unknown. I have questions in with them.

Meanwhile, Tuesday's meeting at the Ellerslie Convention centre was long and tetchy as grumpy investors challenged Hotchin, Chairman Greg Muir and PricewaterhouseCooper's John Waller on the restructure plan, Hotchin's Paratai Drive property and their responsibility for the problems.. Here's an edited selection of the juiciest exchanges. The full version is here.

John Waller from PricewaterhouseCoopers defended the debt restructure plan, saying any legal action against the directors in a receivership would be difficult, time consuming and costly.

"There is NZ$36 million of value here now and some value in the Axis assets. The directors say NZ$40 mln but we say it's worth less than that. And then there's the NZ$20 million of contingent support," he says. "If you get NZ$36 million, that's something," Waller says.

"My old grandmother told me a bird in the hand is worth more than a bird in the bush. On balance we believe the restructuring will give a better chance of recovery," he said. "If you want retribution, then vote for receivership, but the outcome will be difficult and costly." He was applauded widely.

Hotchin was asked by an investor who had compounded his interest with Hanover for years why he hadn't contributed his Paratai Drive property into the restructure. "I'm very angry," the questioner added.

Hotchin responded: "We have a company with NZ$60 million of equity which is very much at risk. In addition we have agreed to pledge new assets. The question is how far do you go with that. We started at NZ$40 million and PwC asked us to put in more," Hotchin replies. "We have put in up to NZ$96 million and that's a significant amount of money."

"In a perfect world we would do everything to make sure the money would be retrieved, but we judged this was appropriate."

Another questioner asked Hotchin about his Paratai Drive property. "They're your homes and your lifestyle. This is our money. If necessary, will you sell those properties to pay us back our money," the questioner asked.

Hotchin replied, saying it's a difficult question. "The Waiheke property has been pledged in the package. The Paratai Drive property. I wish to hell I'd never bought it. It's half finished and couldn't be sold. Our intention is to finish that house and to live in it as our home," Hotchin said.

"If it's (the repayment plan) going to be close and we need to put up more, I guess we'll have to find it from somewhere, and that might have to go in," he said. He was applauded.

* This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.