Rada wind-up application made to court

Press, 22 June 1989, Page 28

Rada wind-up application made to court

PA Wellington ' Rada Corp, Ltd, has failed in an attempt to have thrown out of court bne of two winding-up applications against it by the Bank of New Zealand over a $260 million debt.

Rada is scheduled to face the first application in the Court of Appeal in Wellington on Monday. The Rada lawyer, Mr Mike Ring, said yesterday that a hearing in the High Court in Auckland on Tuesday was intended to make the BNZ choose one of two actions for winding-up. "We applied to have a second winding-up petition set down for July 14 struck out as an abusive court process,” he said. Mr Ring said the court system did not allow a company to face two actions at once over the same case.

But yesterday’s hearing was adjourned by Mr Justice Robertson, who said the matter was not urgent. "The Judge also said that the result of the Court of Appeal hearing would determine whether the second action went ahead,” Mr Ring said.

The winding-up application stems from a sAustl99 million (SNZ26I million) loan the Bank of New Zealand made to Rada in 1987.

The BNZ believes the loan is secured by a $230 million deposit with its Singapore branch, but Rada says it is unsecured.

The Court of Appeal hearing scheduled for Monday is to determine whether the BNZ can carry on a windingup petition against Rada instigated by the National Bank. The hearing date was likely to be postponed because of the court’s workload, Mr Ring said.

Rada paid the National Bank $5 million in February to have it drop the action, but the BNZ applied to replace National.

On February 15, Master Towle let the BNZ replace National, but his decision was overturned by Justice Smellie in April. The BNZ is now petitioning the Court of Appeal to reverse the decision again. The BNZ, meanwhile, lodged its separate windingup petition, which is .scheduled to be heard on July 14.

Rada was one of New Zealand's largest corporate collapses. Its loss of $4BB million in the year to March 1988 is the second highest in New Zealand corporate history. The company is now a subsidiary of Elders Resources NZFP, Ltd.