Bid for assets rejected

Last updated 05:00 02/06/2012

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Two companies owned by property developer David Henderson have lost an application to the High Court over competing claims to the assets of another company associated with him.

The plaintiffs, Gibbston Downs Wines and RFD finance No2, owned by Henderson, had sought a declaration that their security interest over the collateral of Anthem Holdings, which was in receivership, had priority over Perpetual Trust's claim.

Justice Chisholm ruled that given the plaintiffs' security interest did not have priority over Perpetual's, the declarations sought could not be made. The application was dismissed.

Perpetual was entitled to costs against the plaintiff together with disbursements, he ruled.

The background to the case was that Christchurch finance company Propertyfinance Securities (PFS) provided finance to Anthem under a general security agreement in 2005. The securities register for Anthem recorded PFS as the first registered security holder.

The following year Capital+Merchant Finance provided finance to Anthem, on the basis that it held a first ranking security interest.

Ultimately PFS agreed to concede priority to Capital+Merchant. It took seven months for the issue to be resolved and the judgment said the evidence did not disclose what, if anything, was going on behind the scenes in that time. However, that was not significant and it was the agreement that counted.

Capital +Merchant assigned its first ranking security interest to Perpetual in November 2006.

The plaintiffs had contended that the subordination arrangement expired on March 31, 2010 but the judge did not agree.

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