The statutory managers of Hubbard Management Funds are seeking a court decision on how to distribute the fund back to investors.
In their ninth report, statutory managers Graeme McGlinn, Richard Simpson and Trevor Thornton say they've uncovered issues surrounding the fund's management which require a court determination on distribution of funds.
Investor statements prepared in March 2010 by the fund's former head, the late Allan Hubbard, overstated the value of investments in the fund, the managers said.
Mr Hubbard was killed in a car crash in September.
"Transactions reported as having occurred in the periods referred to in investor statements may not have occurred then, or at all," the managers said.
"The accounting system and the record-keeping for [the fund] were such that there was no easy way to align what was owned by HMF with what was allocated to investors."
The fund's value had declined further because of global volatility, to about $44 million.
The statutory managers have filed court papers seeking a determination on the most equitable and fair way to allocate funds to investors.
A court hearing was expected in the middle of next year.
The statutory managers also released their ninth report on Aorangi Securities, saying "disputes and unresolved issues" over asset ownership were delaying payments to investors.
They said Mr Hubbard's death and the lifting of statutory management from him and his wife, Jean, had further complicated matters.
"It is with regret that we will be unable to make further capital distributions to investors at this time and this position will be reassessed in mid-2012."
The managers said they would soon seek a High Court order to transfer land and other assets from Mr Hubbard's estate to Aorangi.
The two companies were placed into statutory management in June last year owing millions of dollars to hundreds of investors.
NZN