It was a pre-packaged deal: Dayle Walker called up her loan to the Learning Ladder early childhood centre in Auckland that she ran jointly with Joanne Young, ejected Joanne and shifted business assets across to a new company she controlled called Learning Ladder (2018) Ltd. For customers, business sailed on as before. For Joanna, she claims to have been robbed, alleging business assets were transferred at a $290,000 undervalue.
In 2015, Walker and Young set up their company Learning Ladder Ltd to operate an early childhood centre in Howick. Working capital was provided with a $430,000 on-demand loan from Dayle Walker and her husband. They took security over company assets through their company: Red 9 Ltd. In March 2018, Red 9 demanded repayment. Joanne Young says Learning Centre was always up to date with loan payments. The Walkers say a management dispute with Ms Young was adversely affecting the business, putting their loan at risk.
It took one day to appoint receivers and arrange a sale with Dayle Walker buying company assets for $470,000 in the name of her newly registered company. Ms Young claims their business was worth $760,000. It was sold at a grossly undervalued figure, she alleges.
Ms Young is suing the receivers alleging they sold at an undervalue. She is also suing Mr Walker alleging breach of contract and breach of fiduciary duty. His accounting firm provided accounting services for Learning Ladder.
Told the earliest date available for a predicted two week trial is August 2022, the two sides asked the High Court for an abbreviated trial: a quick court ruling on what was the value of the business. With that sorted, the case could be settled out of court.
Associate judge Bell agreed it was a case where assessment of loss could be argued without first determining liability for any loss. A short hearing was timetabled for end of November 2021.
Reynolds v. Finnigan – High Court (6.10.21)
21.161