Merbank writ for $13.5M

Press, 20 February 1980, Page 1

Merbank writ for $13.5M

A writ claiming more than $13.5 million indebtedness has been served by Merbank Corporation, Ltd, the merchant bank arm of Securitibank, Ltd, (in liquidation), on the Melbourne-based Commodore hotels and motels group. The Securitibank liquidator, Mr H. Goodman, said yesterday that he had received permission to serve overseas the writ which was lodged in the Supreme Court at Auckland. He had applied for a hearing of the action in the Supreme Court in Christchurch in June. Merbank, which lent

money to build the Chateau Commodore hotels in Christchurch, Blenheim, and Timaru, claimed that the Melbourne group was liable to pay the sum sought under alleged guarantees given on the three hotels when Commodore assumed the shareholding of the Christchurch hotel. Commodore had said it would defend the action, denying it had given any guarantees. Mr Goodman said Merbank sought $9,995,000 in respect of the Christchurch hotel, $3,010,000 in the case of that at Blenheim, and $531,000 for Timaru. Mr Goodman took over

as the Securitibank group liquidator after the death of the original liquidator, Mr K. S. Crawshaw, last May. He said the matter was somewhat complicated, in that other actions were in train. Other parties were concerned about the distribution of funds, of about $3.5 million, held by Mr K. J. Jensen, the statutory manager appointed under the Chateau Companies Act passed by Parliament in June, 1977. Hearings of these actions were set down for the Supreme Court in Christchurch in June. He had sought a contingent date, which meant he

would be involved in several hearings on behalf of secured creditors concerned in this aspect of Securitibank’s liquidation.

Mr Goodman said that in the action against Commodore they were claiming indebtedness, including interest, up to the date of the filing of the writ The total sum sought was $13,537,590. It was the failure of the hotels’ builders and first owners, the H.P. Holt group and its associates, which led to the passing of the Parliamentary act.

Mr Goodman confirmed that his action did not involve present lessees or owners of the hotels.

The Christchurch and Blenheim hotels were sold by tender during 1978 by Mr Jensen. The Timaru hotel was excluded from the tendering because the first mortgage held on that property by Perpetual Trustees Estate and Agency Company of New Zealand, Ltd, was not in dispute. In August, 1978, the Christchurch Chateau Commodore was sold by Mr Jensen to the Welling-ton-based Financial Enterprises, Ltd, for $3.4 million, which was $600,000 below the then Government Valuation.