Liquidators for the Blue Chip group of companies are dropping legal action against the failed company's former directors and auditors.
Blue Chip collapsed in 2008, owing over 2000 investors more than $84 million.
One of the liquidators, Jeff Meltzer, said the company has suspended a $40 million claim on behalf of investors.
He said the liquidators had been unable to obtain the funding needed for what could have been a lengthy legal process.
Mr Meltzer said the scale and complexity of the legal proceedings had proved too challenging for potential funders of the action.
He said creditors will be advised as soon as possible about what will happen next with the liquidation.
Investor Helene Philpott said many will be shocked that the action has been dropped, as it was their last chance to get something back.
She said many investors have died, lost their homes and have stress-related illnesses.
