Funds retention order agreed

Press, 22 July 1989, Page 30

Funds retention order agreed

PA Wellington It was impossible at this stage to accurately estimate the final costs of administering various nominee companies, a lawyer, Mr Graham Lang, told the High Court hearing on Advisorcorp in Wellington. He submitted that orders sought by the receivers as to the retention of funds in order to meet the actual final costs were appropriate in the circumstances. He represented Roderick Thomas McKenzie, chartered accountant, of Palmerston North, and William John Henry Stewart, chartered accountant, of Napier.

The defendants were Alexander Associates, Ltd, Alexander Acceptances, Ltd, Restpoint Roadhouses, Ltd, Restpoint Recreation, Ltd, Restpoint Park, Ltd, Alexander Chambers, Ltd, Alexander Nominees, Ltd, Ko Vai, Ltd, Savings and Second Mortgage, Ltd, Advisorcorp Securities, Ltd, Advisorcorp Nominees, Ltd, Tait Associates, Ltd, Advisorcorp Consultants, Ltd, Advisorcorp Brokers, Ltd, and Alexander Angora, Ltd. Decision was reserved by Mr Justice McGechan. Mr Lang said the application for directions arose from the appointment of the plaintiffs as

statutory receivers and managers. He said Alexander Acceptances had been subject to an order for winding up and was in liquidation. The other companies were under statutory receivership and management. The plaintiffs sought a direction that each nominee mortgage should be treated individually and the status of the individual contributories to each mortgage should be determined accordingly. At a meeting of investors, contributories and creditors in Napier in November, Mr Lang said there was the opinion that pooling of all investments, including mortgage and unsecured investments, was the only just method of dealing with the winding up of the affairs of these companies. He said the court had an inherent jurisdiction to protect the position of the liquidator and the retention of funds was a way to achieve that purpose. It was likely that the final cost of administering the nominee companies would be less than the 10 per cent of funds required. However, it was submitted it was appropriate that the court should allow the greater percentage to be retained at this stage so there could be no possibility of a •shortfall at the end of the administration.