Money paid by True Line shareholder swallowed up

The director of a company placed in liquidation last year has ''started a payment'' to the liquidator.

On July 25 last year True Line Builders Ltd, a residential building company with contracts in Queenstown, Auckland and Great Barrier, appointed liquidator Imran Kamal by ''special resolution of the shareholders''.

Shareholders were, until July 24, Jaden and Jackie Melgren, when the latter was removed.

Mr Melgren became the sole shareholder and and remained the sole director of the company.

Mr Kamal reconstructed the shareholder's account and investigated it, finding a debt owed to the company by the shareholders.

Urgent proceedings were filed in the district court to seek judgement on the debt, but a settlement was negotiated.

The shareholders had since ''started payment'' which was being monitored closely.

The third liquidator's report showed the only receipts between February 28 and July 25 this year were from the shareholder and totalled $37,542. All the money had been absorbed in liquidation fees and disbursements, leaving the bank balance at nil.

Mr Kamal's latest report said he had yet to decide the best course of action to take against Mr Melgren, who, he said, had conducted the business in a manner which may have breached the Companies Act 1993, or what further action to take in respect of tools which went missing.

The liquidator alleged a creditor took some tools belonging to True Line Builders Ltd and hid them.

A Disputes Tribunal referee determined that matter should be heard at the High Court, but it would incur further costs.

No accounts receivable had been collected and Mr Kamal was yet to issue formal notices on voidable transactions - any earlier payment which might be subject to being paid back.

Creditor claims totalled $793,215, of which $609,901 was from 22 unsecured creditors.

There were seven secured creditors, including the IRD.

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