The company couldn’t pay its debts which has left many buyers not getting their houses, as the Herald has reported.
In November, Gross requested Innes to agree to liquidation.
But Innes refused to comply with Gross’s request that a shareholders’ meeting be called to put the company into liquidation.
So Gross called in the Gerry Rea liquidators, the decision said.
Gross wants those liquidators to continue and do a full investigation of the business where they have already found activities which have concerned them.
Francis said after the ruling yesterday that Innes was initially co-operative with the liquidators.
“After our first report was issued, which made it clear we had concerns ... he [Innes] raised issues regarding the validity of our appointment. We sought legal advice and while the initial opinion suggested our appointment was valid, we considered it prudent to refer this matter to the court for clarification. While the court disagreed with our initial legal opinion regarding the validity of the resolution, the court determined it appropriate to appoint us liquidators regardless,” Francis said of the decision.
Francis said he and Dalton had concerns about the management of the company, which “have only grown since we issued our initial report and our investigations are ongoing”.
Innes had raised the idea of voluntary administration to get a better outcome for the customers.
This idea was suggested by us before liquidation commencing on November 25, Francis said.
“However, it was rejected because the business had no likely purchaser and no resources to trade on. The main factory ceased operating two weeks prior to our appointment,” Francis said.
A number of company assets could not be found, making the option of trading on impossible.
“In the circumstances, voluntary administration would have simply caused additional costs with no additional benefit to creditors,” Francis said.
In reaction to the court ruling yesterday, Innes told the Herald from Indonesia that he was “sad for the creditors”.
The sector has been dogged by a string of failures which featured in a Herald editorial on Friday.
Yesterday, the Podular court decision noted big loans to keep the company afloat just weeks before it failed.
The judge said there was a general security agreement with Gross for $220,000 but around September 29 this year, that was upped to $2.5m. But even with all that extra transfer of funds from Gross and another company - Lumens of which Gross is a director - Podular couldn’t continue, the decision said.
It couldn’t pay its debts and was insolvent, the judge noted.
He said he was “satisfied” that the Gerry Rea liquidators should be appointed and he reserved costs.
Maginness said today after the decision was released that he reviewed the liquidators’ appointment and found it was invalid because Innes hadn’t signed it.
“We were not a party to the application made by Gerry Rea and we made no submissions to the court in relation to the application,” he said.
Gross had filed an affidavit to support of Gerry Rea’s application asserting that those liquidators should be appointed and not Baker Tilly, Macguinness said.
“Importantly, I did not and have never held myself out as a friendly liquidator. We are regularly appointed as liquidators by order of the High Court. We also regularly take action against directors, shareholders, or third parties where appropriate,” Maginness told the Herald today.
* Creditors were due to meet at 10.30am today at Karstens NZ, level 4, 205 Queen St to update on the liquidation, confirm the Gerry Rea appointment, form a liquidation committee and examine passing other resolutions.
