Agreeing not to sue for balance of a debt due did not prevent financier Otis Trustee Ltd voting against a scheme of arrangement put up by insolvent house removal specialist Shannon Tawhiti offering creditors three cents in the dollar.
Mr Tawhiti lives in Havelock North. His Hawkes Bay removal business was described as once being worth over twenty million dollars, owning over one hundred properties.
No longer.
He faces bankruptcy; naming personal, market and business disruptions for collapse of his business operations, all exacerbated by COVID-19 pandemic restrictions.
Otis Trustee Ltd, controlled by Auckland-based Ian McKay, put a key part of Mr Tawhiti’s business operations into receivership after defaults on payments due.
Companies Office receivership records show an Otis debt of some $800,000 was not repaid in full.
The High Court was told of a 2025 stand-still agreement between Otis Trustee and Mr Tawhiti. Otis agreed not to take any legal action against Mr Tawhiti personally; but reserved the right to claim in any bankruptcy.
Mr Tawhiti’s Insolvency Act offer of three cents in the dollar to creditors in final settlement of debts owed will avoid potential bankruptcy.
He says the proposal will be funded by family members, friends and future earnings.
When counting creditor votes on Mr Tawhiti’s offered part-payment scheme, a proposed trustee handling voting procedures disallowed a vote against sent in by Otis Trustee.
Otis claims it is now owed $2.037 million by Mr Tawhiti.
The trustee says wording of the stand-still agreement prevents Otis Trustee from voting.
In the High Court, Associate Judge Skelton ruled Otis’ vote should have been accepted provisionally, with a final ruling on validity left to the High Court.
All Insolvency Act part-payment schemes require High Court approval after creditors vote.
The proposed trustee is now required to have all Mr Tawhiti’s creditors reconsider his part-payment proposal, with Otis Trustee’s vote to be included, provisionally or otherwise.
re Tawhiti – High Court (9.02.26)
26.073