Western woes worsen again


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.