Mr Petterson's lawyer, Daniel Hughes, said yesterday the loan's security agreement was specific to the 2010-2011 sales and did not give Mr Crombie security over the 40 tonnes of leaves sold in 2012.
While "an element of unfairness" could be perceived in the situation, given the company's debt to Mr Crombie, in 2012 he signed an agreement to discharge the security, Mr Hughes said. As a businessman who was kept appraised of company developments, Mr Crombie had known he was relinquishing his security.
Mr Crombie's lawyer, Nathan Gray, said a "substitution" of security had been agreed to by all parties at the time, including the company's bankers, ANZ.
Mr Petterson had initially taken the view that the security applied to the 2012 sales, meaning it was appropriate the money go to Mr Crombie, but later changed his view.
"The liquidator said, yes, now he's questioning whether he got it right," Mr Gray said.
The court heard that Mr Crombie rejected allegations made in a letter from the liquidator's lawyers he had breached the Companies Act. "Mr Crombie takes the strongest exception to any suggestion of impropriety on his part," Mr Gray said.
Mr Crombie's insurance business, Crombie Lockwood, began in Hawke's Bay and grew to be nationally successful.
He was awarded the Queen's Service Medal in this year's New Year's Honours.
Another well-known business personality associated with Nature Green is Napier City Council's former economic development manager, Ron Massey, who was a director until resigning from its board in 2010.
In a liquidator's report on the company last year, Mr Petterson criticised Mr Massey's role while he was a director. Mr Massey has denied any wrong-doing.
He was not involved in yesterday's proceedings.
After yesterday's day-long hearing, Associate Judge Warwick Smith reserved his decision on the application.
Mr Petterson and Mr Crombie declined to comment outside court.
