The business of a Taupo mechanic accused of taking a client's Lamborghini on a 600km "joy ride" has entered liquidation, reportedly owing creditors thousands of dollars.

Power Torque owned by Chris Timmerman had earlier been embroiled in a dispute with Aucklander Chris Mosley, who he took his 2017 model Huracan​ Avio to the mechanic to have a tune up and modifications added.

The car was the first of its kind in the country, and so was being fixed with a special kit Power Torque imported from the US.

Mosley told the Herald at the time, he assumed the company would run his luxury car on a dyno machine as part of the tuning process, as well as running it briefly on the road.

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"But when I picked the car up from them it had another 600km on the speedo than it did when I dropped it off", he alleged.

While Timmerman denied any wrongdoing, Mosley claimed he also discovered his car had been driven at speeds of up to 170km/h with an aftermarket GPS system showing it had been driven to Rotorua and back twice.

"It looks like they took it for a joyride, obviously because they liked the car," he said.

Timmerman responded by saying he had hired a lawyer to demand Mosley pay $58,000 in unpaid bills as a result of Power Torque's work on the car and to threaten defamation action over Facebook posts.

Now he says the dispute with Mosley is what drove his business under.

He told Stuff today that Mosley's unpaid bills and defamatory comments on social media had caused Power Torque to lose more than $300,000 in other work as a result of the bad publicity.

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The collapse of the business also left local employees out of a job and hurt Taupo schools that been sponsored by Power Torque, he said.

"If Mosley had paid his bill we wouldn't be having this conversation," Timmerman said.

Mosley, in turn, told the media outlet he had no sympathy for his former mechanic but did have empathy for the small businesses that would never be paid money owed them by Power Torque.