Key Points:

An Auckland law firm has responded to a lobby group's complaint over the handling of action against a Blue Chip investor.

Jonathan Flaws, a partner with Sanderson Weir, has apologised for the way a demand notice was served on an elderly Tauranga investor.

Flaws issued a statement saying he regretted the events surrounding Gwendoline Harrison, who this month got notice of unpaid debts. She owes more than $300,000 after entering an arrangement to mortgage her house to invest with Blue Chip.

Suzanne Edmonds, of the lobby group Exposing Unacceptable Financial Advice, complained to the law firm over the way the matter was handled.

Edmonds said she was worried about Harrison's health and questioned how she could have been served with payment demands when she was sick and in bed. Edmonds door-stopped Nicola Robertson, of Sanderson Weir, last week to make her views known and invited the media along to see what happened.

Robertson said the law firm used an external agency to issue demands and asked who Harrison's lawyer was.

A few days later, Flaws issued a statement saying a notice of default under a mortgage was prepared by his law firm on behalf of an Australian lender and this was delivered to a Harrison by a contracted server.

"We also understand that while this notice related to a default on a loan secured against the woman's home, she had purchased a Blue Chip property in another transaction.

"It is regrettable that we had only part of this information at Sanderson Weir when the default notice was delivered by our contracted party. We did not have any information about the woman in relation to Blue Chip. Our only information related to a loan secured against the property in which she resided.

"We did not know the woman's age, personal health or any of the wider issues. This is information that solicitors preparing default notices for lenders would not normally expect to be told.

"Had we known about her age and personal health circumstances, we would have arranged for the notice to be served in a more appropriate way and we deeply regret the distress it may have caused. We apologise to the woman and her family that such a notice should have been served under these personal circumstances."

The law firm would in future encourage any service contractors to use discretion if they become aware of such circumstances.

Information from Edmonds showed the notice was from lender TEA telling Harrison she must immediately pay $8320.20 on her loan which was in default. The notice said if payments were not forthcoming, the lender had the power to take possession of Harrison's house and sell it.

Creditors are claiming more than $80 million from 21 Blue Chip companies in liquidation.