KEY POINTS:
Investors have cast their votes on the future of failed finance company Hanover Finance at a meeting in Auckland, with a result expected soon.
The emotions of some investors boiled over at today's meeting, with one
saying "some investors present won't live long enough to see their money paid back" under the proposed rescue plan.
Hanover and United Finance investors voted on whether to back shareholders Mark Hotchin and Eric Watson's debt restructuring plan for the companies or to put them into receivership. It proposes repaying investors' frozen $527 million principal over the next five years.
Several investors asked Hotchin if he would be pledging his own properties to help pay back investors, including his home in the expensive street of Paratai Drive.
Hotchin said his Waiheke Island property had already been pledged and his Paratai Drive home was only half-built.
"Our intention is to finish the house and have it as our home," he said. If necessary, it would be sold.
Chairman Greg Muir defended the company for its attracting investors as close as one month before the moratorium was declared.
"Up until June we were still confident we could pay you back," said Muir.
He said two things had lead to the situation changing. First, the property market collapsed and secondly, other finance companies began to go under or declare moratoriums.
One investor at the meeting, Peter Brown, asked PricewaterhouseCoopers John Waller if the behaviour of directors had been analysed as part of its independent report into Hanover.
Waller said the company had looked at the possibility of litigation if Hanover had gone into receivership.
"There is a great uncertainty, cost and timeframe," said Waller.
He said investors had to weigh this up against the possibility of getting "money in the hand" under the restructure plan.
"If you want retribution and all of that - vote for receivership."
Hanover executives were asked at the meeting if they would remain in their positions should the plan be approved.
Chief executive Peter Fredricson said he would remain in the job as long as investors wanted him there.
"I've had a lot of abuse, particularly over the last two or three weeks," he said. "I'm happy to do the job so long as you want me to."
Chairman Muir said he had planned previously to take on an executive job and he would be leaving Hanover. Muir, a former chief executive at The Warehouse, said earlier this month that he was taking on the job of chief executive at childrenswear retailer Pumpkin Patch.
Shareholders' Association chairman Bruce Sheppard tried to ask a series of questions at today's meeting, but after a show of hands from those at the meeting, was only allowed to ask one.
He asked PwC's John Waller how much could be gained by taking legal action against directors and whether that had been included as part of the investigation into the receivership option.
Waller said this would require a lot of legal advice -- but on balance there was an opportunity to get more money back under the restructure plan than under receivership.
One investor speaking before the meeting began, Arthur Downes, said he would be voting in favour of the rescue plan, saying it was "the best chance of getting it back, even though we have to be patient."
"A lot of us have been stung by a few others," said Downes. A keen traveller, Downes said the Hanover collapse had meant he had been forced to curtail his travel plans.
Another Hanover investor, Pauline Stansfield, said she put money into the company "because they were paying 1 per cent extra than the bank". The bank had encouraged her to "spread her money around".
"It's been very disappointing," she said.
"We've had a very difficult time deciding which way to go," said Stansfield.
She remains hopeful of getting all the money she had invested with Hanover back. Regardless of this, she told nzherald.co.nz that the Government should "step in and regulate finance companies."
EDWARD GAY/HERALD ONLINE
Full details of the payback plan are available at:Hanover Finance
