It was attack and counter-attack in a war between shareholders with high profile insolvency specialist Damien Grant siding with shareholder Clinton Webber who was pushed out of a struggling South Auckland residential property development at Ormiston Rise while Webber’s former financial partner and fellow shareholder Arena Alceon then sued Grant, claiming he failed to act properly, lacking independence in going after Arena.
In 2021, US financier Arena Alceon put the Ormiston Rise development into receivership, with the part-finished project sold to a related company, cutting out Webber’s Foundation Developments Ltd from any share in potential profits.
The High Court was told Mr Webber then met with insolvency specialist Mr Grant and between the two they put in place a plan to put Ormiston Rise into liquidation and then challenge Arena’s use of receivership to gain full control.
Their first step was to put Ormiston Rise into Companies Act administration.
The High Court was to later rule Mr Grant lacked professional independence when acting for Mr Webber and failed to follow correct statutory procedures when putting Ormiston Rise into administration, part of a tactically necessary first step prior to liquidation.
Despite these false steps, Associate Judge Lester did not remove Mr Grant from his current position as liquidator of Ormiston Rise, ruling any monetary penalties against him will be dealt with in the liquidation wash-up.
The High Court was told of tense meetings between Mr Webber and Arena Alceon in 2021, resulting in shareholder/creditor Arena calling up its loan.
Following a lengthy meeting between Mr Webber and Mr Grant at an Auckland café, it was decided to put Ormiston into administration.
This could be achieved easily, using a voting majority at board level now held by interests associated with Mr Webber.
Two Arena-appointed directors had previously been removed from the board.
The philosophy behind Companies Act voluntary administration procedures is to create a brief breathing space, allowing creditors to determine whether a company can be saved, or should be put into liquidation.
Insolvency practitioners acting as administrators are required to act impartially, exercising professional independence.
Associate Judge Lester was to later rule that Mr Grant acted as if Mr Webber were his client.
Companies Act administration was a necessary first step towards liquidation of the Ormiston Rise companies; Mr Webber and his associates did not have sufficient voting power as shareholders to put these companies directly into liquidation.
Mr Grant’s lack of independence was evidenced by steps taken ‘touting’ for votes from Ormiston creditors who were likely to support a plan for creditors to support the shift from administration to liquidation. There was evidence of Arena’s rights to vote as a creditor being disputed.
There was no adequate disclosure of the fact Mr Webber was bankrolling his fees.
Judge Lester said it was clear administration was intended to later gain leverage over Arena with an internal email sent by Mr Grant indicating it was a strategy designed to ‘frighten the horses.’
Mr Grant billed Ormiston $180,000 for work done during administration, prior to Ormiston going into liquidation. Arena questioned this level of fees charged for some five weeks work on Companies Act administration for a single-asset company where that asset had already been sold by the Arena-appointed receiver.
Judge Lester said the level of work done was more applicable to a liquidation investigation, ruling this was further evidence of Mr Grant lacking proper independence and acting for the benefit of Mr Webber.
With separate Ormiston litigation pending over Arena’s alleged misuse of the receivership process to maximise its return from the Ormiston Rise project, Judge Lester ruled Mr Grant as liquidator is to use external legal advisers, not in-house lawyers, for any further legal advice required in this dispute.
Mr Grant’s entitlement to fees charged for the five week period of administration and for fees charged to date for in-house legal advice are to be reviewed when the Ormiston Rise company liquidations are complete, Judge Lester said.
In-house lawyers at Mr Grant’s Waterstone insolvency practice billed for work done as if they were an external law firm.
Arena Alceon NZ Credit Partners LLC v. Grant – High Court (28.05.25)
25.128