Govt will only get back 28-33 cents on Viaduct failure

Some $7.3 million of the $7.8 million owed to 110 investors was covered by the government guarantee, but receiver Iain McLennan of McDonald Vague says the crown can only expect to claw back between 28 cents and 33 cents in the dollar.

The collapse of Paul Bublitz's Mutual Finance is dragging on Viaduct's potential recoveries, with the two firms looking to provide further funds on securities they each offered to maximise returns.

"As there is now no hope of that further funding, some securities have gone from our initial assessment of potentially providing some funds to the company, to having no chance of recovery," McLennan said in his first report. "Our estimate of recovery is possibly at the low end."

The remaining $500,000 owed to 16 investors came in after Viaduct was booted out of the guarantee after it failed to comply with related-party lending rules and did not undertake due diligence on loans from Bublitz's Hunter Capital Group.