KEY POINTS:
Hanover investors will meet today to vote on the finance company's proposed rescue plan but the firm believes it already has the numbers to get back in business.
In opposition to an unsuccessful application put forward on behalf of investors seeking an injunction to halt the rescue plan meeting, Hanover said more than half the value of proxy votes that had been received by midday yesterday were in favour of the rescue scheme.
"Just on that alone it is safe to say that the creditors are going to overwhelmingly support and adopt the proposal and we expect to see that at the meeting," said Hanover's representative, Bruce Stewart, QC, in the High Court at Auckland yesterday.
Hanover and United Finance investors will meet at 10.30am today at Ellerslie Event Centre to vote on whether to back shareholders Mark Hotchin and Eric Watson's debt restructuring plan for the companies or to put them into receivership.
Investors' lobby group EUFA (exposing unacceptable financial activities) issued the injunction attempting to delay today's vote on Friday afternoon.
Yesterday Paul Dale, lawyer for disaffected investors, spent two hours arguing that not enough time had been given for his clients to make up their minds. He said investors were finding the decision too difficult and said the report released by PricewaterhouseCoopers last month was "deceptive and misleading".
Investors needed time to consult commercial lawyers in order to understand the subtleties of the report and what their rights were.
Dale argued Hanover and the trustees Perpetual Trust and United Finance had failed to give all investors the 14 days' notice necessary before such a meeting.
Justice Paul Heath, hearing the case, said: "If it has taken PricewaterhouseCoopers three months to come up with the report it seems a bit rich for investors to come up with a decision in a small amount of time."
Having received the case only at 11.30am yesterday, the judge said he needed more time to consider the investors' case of a breach of notice requirements with regard to United Finance, which would render its meeting unlawful.
But he said if it was found to be unlawful the investors would have a case for the meeting, and its outcome, being null and void. However this did not affect the Hanover meeting.
Stewart said Hanover had not had any requests for more time before Friday afternoon, and delaying the rescue scheme for the sake of two plaintiffs who found the proposal "too difficult" would be detrimental to the other 17,500 Hanover investors.
He said trustees had the investors' best interests at heart when they commissioned one of the most reputable companies to produce the report, which had said the rescue plan would recover more of their funds than receivership.
Justice Heath ruled in favour of Hanover, which means the meeting will go ahead today.
About 16,500 investors are owed $527 million. Hanover, chaired by Greg Muir, proposes to repay investors' capital over the next five years. It has conducted 11 meetings in the past two weeks to explain its plan.
In an independent report PriceWaterhouseCoopers said its analysis indicated "a real prospect that investors may not achieve full repayment" under the proposal. "However, virtually the same analysis and conclusions apply in the event of a receivership."
Commentators such as Brian Gaynor have spoken out against the rescue package.
THE PROPOSAL
* Hanover Finance and United Finance say they will repay debenture investors all of their $527 million principal over the next five years.
* Payments start out at 2c in the dollar per quarter next year, rising to 2.5c in 2010, 3c in 2011 and 8.75c a quarter over 2012 and 2013.
* Independent adviser PricewaterhouseCoopers says the management plan is "optimistic" but looks better for investors than a receivership.
* PWC also estimates that full repayment over five years is actually only worth about 46c to 55c in "net present value".
* There is some prospect that investors will receive some return after their principal is repaid but Hanover is downplaying that possibility.
THE MEETING
* Debenture holders vote on the proposal at a meeting today beginning at 10.30am at the Ellerslie Event Centre in Auckland.
Full details of the payback plan are available at:Hanover Finance
