Ginkgo costs too high for creditors

Nature Green New Zealand creditors are unlikely to pay for legal action being filed against their two former directors, Hawke's Bay men Ron Massey and John Knight.

The liquidator representing the ginkgo company, David Petterson, said while he had letters of support to file for court action, the creditors also indicated they were not in a position to contribute towards the costs.

"They can't afford to put money into it, they have been through quite a lot already."

Mr Pettersen said the finance to pay for court proceedings had been secured.

He said the costs would be between $100,000 and $150,000.

He said the costs would be paid back if the court action ruled in favour of the liquidator.

The loan would be written off if the litigation was unsuccessful.

If there was any "profit" from a successful court decision, Mr Pettersen said the money would go back to the creditors.

The Nature Green venture involved selling ginkgo trees to growers, some in Hawke's Bay and others in the Nelson/Marlborough region, then buying back the leaves to make into extract.

There was a market for the extract to be used as a medicine but the company went into liquidation in July 2012.

As the liquidator, Mr Petterson took over the remaining assetsof the company, which included an amount of extract from ginkgo leaf.

He was now trying to value the product so it could be sold to the market.

"We are re-testing the extract to tell us how much degradation has occurred but we expect it will be good for another two years.

"We've had some inquiries from parties.

"We anticipate the sale of the product will make a significant contribution to the [court] costs."

Mr Massey, the Napier City Council's economic development manager, said he had not received notice of any court action filed against him.

He said, however, he was looking forward to having a chance in court to prove he had not acted inappropriately as a director of the company.