FORMER directors of failed managed investment scheme operator Timbercorp stand to gain million-dollar payouts, while investors and most shareholders walk away with nothing.

Since it was founded by Robert Hance and David Muir in 1992, Timbercorp has poured $2 billion of 18,500 grower-investors' funds into failed eucalypt, almond, citrus, grape, olive and other managed investment schemes.

But both men stand to share in $59 million generated from the sale of assets tucked away in the Timbercorp Primary Infrastructure Fund safe haven, beyond the reach of Timbercorp creditors.

Mr Hance and Mr Muir stand to share in up to $2.42 million from the 2.2 million units they hold in the fund, which sold its almond properties and water rights to Singapore agribusiness firm Olam International last week.

Olam agreed to pay $160 million for TPIF's two almond orchards at Robinvale, covering 3853ha, and the associated 48,259 megalitres of permanent water rights.

TPIF's senior lender, the ANZ Bank, is owed $101 million, but that still leaves $59 million in the kitty.

TPIF also stands to generate more from the sale of its 426ha Solara South citrus property at Renmark and the remaining parcel of 5410 megalitres of permanent water rights. The water alone is worth about $12 million.

But just how much Mr Hance and Mr Muir get in the final carve-up will depend on legal argument in the Supreme court.

In a statement issued last week, TPIF chairman Trevor Moyle said:

"It is unclear ... as to the extent of surplus proceeds that may be available for distribution by TOT 3 and TOT 5 (the almond orchard trusts) to TPiF, until the full extent of claims by the senior lender, other creditors and/or claimants ... are determined".

Mr Hance's son, Tony Hance, stands to earn up to $275,000 from the 250,000 units he holds in TPIF.

One Timbercorp investor said she was "speechless" to learn Mr Hance and other former Timbercorp directors could walk away with money after she had lost $100,000.

"We're still being chased for money we owe on our investment in those almonds," she said.

Another investor, who borrowed $250,000 for Timbercorp MISs, said he was appalled at the prospect of Timbercorp directors getting anything.

"(But) they get away with it," the investor said.

Mr Hance said he had not followed through on the issue of the TPIF carve-up.

"You get what you get, if there's something there you get it, if there's not you don't," Mr Hance said.

Asked whether he felt investors would react badly to his gaining a payout from the TPIF assets sale, Mr Hance said that was a question for investors.

Former Timbercorp director and chief executive Sol Rabinowicz, who owns 85,000 TPIF units, said he did not know all the detail of the sale.

"There's also the unsecured note (holders) and there may be some apportionment to (MIS) growers," Mr Rabinowicz said.

"But I don't know the deal."

The $59 million left over from the Olam sale, could deliver up $1.10 on each unit.

Of TPIF's 53.3 million units:

  • 24.7 million are owned by Timbercorp, in liquidation.
  • Robert Hance owns 1.1 million units.
  • David Muir owns 1.1 million units.
  • Tony Hance owns 250,000 units.
  • Another former Timbercorp director and chairman Rod Fitzroy owns 731,481 TPIF units.

But Mr Fitzroy said he thought growers were more likely to gain a return from the carve-up than unit holders.

"Because of the situation I don't want to voice a view," Mr Fitzroy said.

"I believe it's not an appropriate thing to go into."

Loti Smorgon, the wife of late industrialist Victor Smorgon, holds 3.7 million units, worth up to $4m.

In November 2004 the Victor Smorgon Group bought 10 million shares from Timbercorp co-founders David Muir and Robert Hance for $16 million. Those shares are now worthless.

Former Timbercorp director and chairman (2002-Oct 2008) Kevin Hayes did hold 250,000 units, according to 2008 TPIF list of top 20 unitholders.

However, it appears the latest register shows the units are now held by Bond Street Custodians.

On December 9, last year Sol Rabinowicz paid $6300 to boost his holding in TPF from 55,000 up to 85,000 units.