Winding-up dispute

Press, 12 February 1979, Page 12

Winding-up dispute

PA Auckland Leave for a petitioner to withdraw from an application to wind up Mercantile Developments, Ltd, has been granted by Mr Justice Barker in the Supreme Court at Auckland. However, the company is still not free from petition filed to wind it up with the emergence of Mike Mayerhofler, Ltd, as a creditor wanting to substitute A.G.H. Finance, Ltd. as the petitioning creditor. His Honour allowed Mr M. C. Black, for A.G.H. Finance, to withdraw as a petitioning creditor. But Miss C. B. Durbin, for Mike Mayerhofler, Ltd, told the court that a debt of $20,000 was owed by Mercantile development's to her client. Mayerholflers therefore wanted to substitute as petitioning creditor. Mr A. F. Grant, for

Mercantile Developments, submitted that the debt was disputed.

His clients ’ felt that Mayerhoflers, who had done the drainage work on some T'akanini properties for a consortium of companies which included his clients, had exceeded their time by some forty weeks. Mayerhoflers had also recently reduced the bill from $20,000 to $lO,OOO.

His Honour said that if the debt was disputed then a creditor wanting to substitute would not be able to do so.

If the argument was genuine then the court had to let litigation take its course before any decision could be made over substitution.

He adjourned the matter so he could read affadavits on it.

The Auckland headquarters of Mercantile developments will be sold by auction under a Supreme

Court order on February 27 on behalf of the mortgagee, N.Z.I. Finance, Ltd. The mortgage is for $338,500. The building is also under mortgage to a Dunedin company, Commercial Nominees, Ltd, for $115,000 and to a securitibank subsidiary, Merbank (in liquidation). The sum in the latter is not known.

The building ios owned by Oxton Properties, part of the Mercantile Group, which occupies the first floor. Merantile developments originally guaranteed the $338,500 N.Z.I. mortgage on which Oxton Properties subsequently defaulted. At a court sale last November, N.Z.I. Finance, as a second mortgagee on property owned by Mercantile Developments at Takanini, was forced to buy and pay off the first mortgagee to avoid losing its security.