Questions have been raised over the directorship of failed drug treatment facility Hanmer Clinics following revelations it kept trading while financially doomed.
The Dominion Post said it obtained documents saying the clinic was in serious financial trouble at least two years before the government withdrew its funding.
The Queen Mary
Hospital clinic has been a refuge for drug and alcohol addicts for about 30-years.
Liquidator BDO Spicers found that on the face of it there was a right of action against the directors for reckless trading following it's November 2003 folding.
BDO Spicers said information it had showed the company was insolvent as early as June 2000.
"Despite a major restructuring exercise undertaken by the board the company appeared to continue to trade and make further trading losses," a six-monthly report, dated May 13, 2005, says.
The latest report, from last December, said while the investigation was complete, liquidation couldn't be concluded until the completion of any action regarding directors' conduct.
The Companies Office lists Hanmer Clinics' directors as John Stuart Beattie, Matthew David Beattie and Robert George Mappin Fenwick.
Chairman John Beattie said his lawyers had responded to the liquidator's statement that there was a case for reckless trading.
He said the matter "had to take its course".
Lawyer for Mr Fenwick, Bret Gustafson, said he "totally rejected" the allegation of reckless trading and the directors had "taken issue" with the liquidator's statement.
- NZPA
