Ex-finance chief repels liquidation bid

23:12, Feb 19 2014

Crown Asset Management has failed in a bid to put a company owned by former South Canterbury Finance chief executive Lachie McLeod into liquidation over a debt of $16.7 million.

In the High Court in Christchurch, associate judge Rob Osbourne dismissed the claim on the basis that while there was a genuine and substantial dispute to the existence of the debt, Crown Asset Management had not satisfied the court it was a creditor.

The judge said Crown Asset Management could establish its case through an ordinary proceeding, not through liquidation.

Mr McLeod is the sole shareholder and director of the targeted company, Dunvegan Seadown Ltd.

Crown Asset Management claimed the company failed to pay the loan balance due to South Canterbury Finance on November 30, 2011, the day he ceased to be chief executive. Dunvegan Seadown's sole asset is shares in the Southbury Group, which is in liquidation. Crown Asset Management was incorporated in February 2012 to acquire the assets of five defunct finance companies repaid by the Government under its retail deposit guarantee scheme.

Mr McLeod's lawyers claim the liability was extinguished when the 1 million Southbury shares, which the money was borrowed for, were returned to South Canterbury Finance as part of an employment settlement agreement. Mr McLeod did not give evidence at the hearing.

South Canterbury Finance collapsed in 2010 owing $1.58 billion.


The Timaru Herald