Payout for former HC partner
Eighteen months after leaving HC Partners, former partner Nigel Gormack has won a $191,315 payout for his share in the accounting firm's buildings.
A decision released publicly this week by the High Court at Timaru ordered the remaining partners to pay out his share by yesterday.
The firm's partners acquired business premises in Timaru and Waimate and put them into Foresters Buildings, with the family trusts of each partner becoming equal shareholders.
After Mr Gormack left the firm in January last year, his trust sought to recover its $191,315 shareholding in Foresters.
The remaining partners opposed the move and said it should be set aside as an abuse of process as it would cause the liquidation of Foresters. A number of varying valuations were put in front of the judge in July.
Associate Judge Osbourne found in favour of Mr Gormack, finding evidence by partner Paul Wolffenbuttel to be "incomplete".
He had argued that if the buildings were sold - based on values recorded in the Foresters financial statements - and the mortgage repaid, there would be a deficit of $674,084.
"Mr Wolffenbuttel appears to have deliberately refrained from stating a belief as to whether Foresters assets exceed or are less than its liabilities," Judge Osbourne said in his judgement.
"Foresters financial statements took as figures for fixed assets the rateable values rather than any current market valuations provided by registered valuers."
In December 2010 a valuation had been provided for vacant possession due to Allan Hubbard being placed in statutory management and statutory managers seeking the value owed to his trust, Te Tua Trust.
"The motivation of the Foresters directors in December 2010 is obvious - namely to put a case to the Hubbard statutory managers which would justify buying out the Te Tua interests at the lowest price reasonably attainable. As Mr Wolffenbuttel must have appreciated, the use of a valuation based on vacant possession might not address the true value of the properties."
Failing payment to Mr Gormack's trust by yesterday an application could be made to put Foresters into liquidation.
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