Veritas Investments has kicked off legal proceedings against the buyer of the upmarket Nosh Group supermarkets over late payments.
NZX-listed Veritas alleges Gosh Holdings, since renamed as Nosh Group, consistently failed to meet a payment schedule, breaching a sale and purchase agreement which was completed in February and missing $1.9 million of payments to creditors.
Veritas sold Nosh to Gosh in February this year for $4m and says it is owed about $69,000 by the chain's new owner.
"We entered into this transaction in good faith after a rigorous process and it is extremely disappointing that the directors of Gosh Holdings Limited (now Nosh Group Limited) have clearly failed and continue to fail to meet their financial and legal obligations," chairman Tim Cook alleged in a statement to the stock exchange.
"When Veritas originally purchased Nosh, Veritas committed to meet all creditors payments, which amounted to $3.9m, and honoured this."
Today it was revealed that Nosh has shut down at least four stores temporarily.
A staff member who did not want to be named said he was waiting to be paid his wages. A creditor told the Herald her business was also waiting for payment for stock.
A notice on the Dominion Road Nosh site said the store was closed for relaunch. Another sign on the same store said they had low stock.
"Our stock supplies in this store are extremely low this week. We apologise for the inconvenience and ask that you bear with us while we work on stock replenishment," the Dominion Road store notice read.
Other sites in Greenlane and Glen Innes had notices saying they were closed for relaunch until June 26.
Nosh in Ponsonby had a sign saying it was closed for relocation but did not give a date.
The Herald has seen a copy of a letter to Nosh staff on Wednesday thanking workers for their support "through these difficult times".
"We have been working on short-term and long-term funding over the past months and have secured the first tranche of funding and have signed the paperwork today," Gosh Holdings director Andrew Phillips said in the letter.
"The funds to be deposited are coming from via my financing contacts in Australia to be deposited into the Nosh Group bank account to cover today's payroll and other immediate requirements," the letter said.
Phillips said in the letter that the business valued its staff and "look forward to the rebuilding of Nosh".
"Please accept our sincere apologies for this situation and thank you for your patience and understanding at this challenging time."
The grocery chain was sold by NZX-listed company Veritas in February to entities associated with the Sydney-based Phillips.
Suppliers have told the Herald they are waiting for payment from Nosh.
Latesha Randall from Raglan Coconut Yoghurt said her business was owed $9000.
Randall said she was told by Nosh's Phillips that her company would be paid.
"I am hoping he can make good on this promise - there are certainly a lot of frustrated suppliers hoping this all works out," she said.
Andrew Phillips did not return calls or emails today.
- additional reporting: Francis Cook