Mutual Finance's receivers expect to recover no more than 53% of the NZ$9.3 million owed to 340 secured deposit holders when the government guaranteed property financier was tipped into receivership last July.
In their second report, KordaMentha's Grant Graham and Brendon Gibson say a 40% to 53% recovery range is their preliminary estimate after reviewing Mutual Finance's loans. Mutual Finance, now under investigation by the Serious Fraud Office (SFO), was covered by the Crown retail deposit guarantee scheme. Graham and Gibson say Treasury has confirmed all Mutual's investors have been repaid.
Mutual Finance's trustee, Covenant Trustee, pulled the plug last July after "forming the view" the company may have breached its minimum capital ratio. Mutual Finance was run by former Strategic Finance founder Paul Bublitz, who was also involved with Hunter Capital, which was behind another failed property financier, Viaduct Capital.
Graham and Gibson, who were paid fees of NZ$220,906 from July 14 last year to January 13 this year, say they were appointed to try and recover NZ$8.2 million of loans, and for properties in New Plymouth and Cable Bay, plus a debtors ledger of NZ$396,000, to be realised. They say they're yet to receive a claim from the Inland Revenue Department and put the unsecured creditor liability at NZ$161,000. It's "extremely unlikely" there will be a return to unsecured creditors.
The SFO opened an investigation into Mutual Finance on December 23 last year after considering information obtained from KordaMentha and the National Enforcement Unit of the Ministry of Economic Development. It said there was reason to suspect an investigation into the affairs of Mutual Finance and related companies may disclose serious or complex fraud.