Livingspace liquidator Robert Walker alleges RFD Finance Ltd, associated with property developer David Henderson, improperly extracted excessive funds when acting as a mortgagee in possession of Livingspace’s Invercargill and Dunedin accommodation businesses over a two-year period up to 2012.
Kristina Buxton, Mr Henderson’s spouse, is sole shareholder of RFD Finance. She has been the company’s sole director since 2014. The High Court was told RFD Finance took over Livingspace Properties Ltd’s business operations in September 2010 as mortgagee in possession, running the business to generate funds in repayment of a $300,000 loan. Livingspace operated accommodation businesses in Tay Street Invercargill and Castle Street Dunedin. To protect debtors, strict legal rules govern mortgagees in possession. They must strictly account for their activities. The liquidator of Livingspace alleges RFD Finance extracted more from the business as mortgagee in possession than was necessary to recover its costs. This reduced the amount available for Livingspace and its unpaid creditors, he alleges. Companies Office records state unsecured creditors are owed $12.8 million.
There was evidence in a 2012 court case that RFD Finance had remained in possession after recovering sufficient to repay its outstanding loan plus interest. Livingspace’s liquidator was ignored when asking RFD Finance to provide details of its Livingspace transactions.
Associate judge Osborne ordered Ms Buxton hand over accounting records detailing RFD’s activities as mortgagee in possession. Ms Buxton said she has instructed lawyers to have Mr Walker removed as liquidator of Livingspace.
re Livingspace Properties Ltd – High Court (29.05.18)
18.117