Two US investors claiming an interest in Mahana Estates winery based in Upper Moutere sued to have $6.2 million frozen from sale proceeds should the business sell. It is currently on the market, but not widely advertised.
James Murren and Daniel Lee put about $US2.3 million into the winery, then known as Woollaston Estates, over a seven year period ending 2008 for what they claim is a part share in the business. Glenn Schaeffer, also a US citizen, introduced them to the investment. They allege Mr Schaeffer duped them. They are suing for negligent misstatement, deceit, fraudulent misrepresentation and a breach of the Fair Trading Act. They have suspicions Mr Schaeffer is selling up on the sly, potentially leaving them out of pocket. Mr Schaeffer and associated entities control eighty per cent of the business; the Woollaston family, twenty per cent.
The Court of Appeal imposed a freezing order over Mahana Estate sale proceeds ahead of a full trial later this year, in October. Mr Schaeffer is free to sell the business, but net proceeds after payment of mortgages are frozen up to a total of $6.2 million. The court was told Mr Schaeffer has recently taken a $22 million mortgage over business assets. This is not to be repaid ahead of the frozen $6.2 million, the court ruled. There was also evidence of mortgages in favour of his spouse.
Mr Murren and Mr Lee were alerted to the possibility of Mr Schaeffer removing company assets when he collected one million dollars from a major sale of artwork in October 2017. The court was told this was used to buy wine produced by Mahana Estates, wine which has since been taken out of the country.
Murren v. Schaeffer – Court of Appeal (23.08.18)
18.170