Western woes worsen again

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Projected losses at failed Queenstown insurance company Western Pacific just keep on climbing.
 
New figures late last week from liquidators Simon Thorn and David Ruscoe estimate unsecured creditors are owed $63.4 million. 

Of this sum, $61.5m comprises insurance claims, the liquidators say. These mostly stem from the two Christchurch earthquakes. 

The latest report by Thorn and Ruscoe also notes they have secured about $34m of reinsurance – meaning Western’s final wash-up may leave policyholders and other creditors whistling for somewhere in the region of $28 million. 

Thorn and Ruscoe were appointed in early April by Western director/shareholders Graham Smolenski, a prominent Queenstown businessman, and his brother-in-law Jeff McNally. 

The liquidators’ first report showed the makings of a $5m deficit but by June that had blown out to $10m – and Thorn and Ruscoe were warning worse was to come. 

They were right – their next report in September approximated a likely deficit of $18m, about $10m less than the latest figures now indicate. 

The difficulty has been the ever-increasing number and value of Christchurch insurance claims. 

Thorn and Ruscoe have previously said when Western crashed that the pint-size insurance company had written policies with $10 billion of risk.