Liquidators chalk up small win in battle over Jean Jones chain

The liquidators of a company that ran retailer Jean Jones are claiming a small victory in a wider battle over who owns the nationwide chain.

The clothing retailer and manufacturer's former landlord has refused to hand over equipment valued at $233,000 to those now running the business.

In May Michael Ward, from the Ward family which established Jean Jones, was forced to put his three companies into liquidation owing at least $4 million. He had run the business through one of them, Michael Ward 1969 Ltd.

The previous month $680,000 of Jean Jones' assets had been seized by interests associated with company accountant Nigel O'Leary and financier John Gardner. Both are directors of and have holdings in small Gisborne finance company Rockforte Finance.

The men say they exercised their rights as financiers of the business, and Gardner now runs Jean Jones.

But Rockforte never officially lent any money to Michael Ward 1969.

They moved the business from its Crooks Rd, East Tamaki, factory and Rockforte Finance issued repossession notices for sewing machines and other equipment at the Crooks Rd site. However, the landlord at Crooks Rd had funded a significant part of the $233,000 fitout on behalf of Michael Ward 1969 and demanded more documentation.

"The repossession notices didn't make any sense," said the landlord's lawyer, Graham Jordan. "The arrangements my client had were with Michael Ward 1969."

No further documentation has been forthcoming and the equipment will be auctioned on site on November 4.

Liquidator Bernie Montgomerie said any funds raised would go towards funding further action following the company failures. The liquidators were negotiating with Australian liquidation funders with a view to a civil case. They also planned to involve the authorities.

"We have now got sufficient information to lay a formal complaint with the Serious Fraud Office."

Because of the way O'Leary's and Gardner's interests had gone about things they had avoided paying preferential creditors - the staff and the Inland Revenue Department - close to $1 million, Montgomerie alleged.

He said he understood the IRD was looking at action against O'Leary on the grounds that he acted as a shadow director of Jean Jones and was therefore liable for the debt.

O'Leary said he had no comment on the equipment at Crooks Rd or further action after the Jean Jones liquidations.