Jean Jones stores are continuing to trade, though four have closed outside Auckland. Photo / Richard Robinson
An unusual stoush over the ownership of women's clothing chain Jean Jones looks likely to head to court.
Original owner Michael Ward knew nothing about it when the assets of the business were seized on April 24 and relocated to another site, the liquidator of his company says.
The chain
of 20-plus stores ran into financial difficulties as a result of the economic slowdown and became increasingly dependent on short term financing, liquidator Bernard Montgomerie said.
Attempts were made to restructure the business but negotiations between Ward, management and financiers broke down.
Financier SH Lock had security over all of the company's assets through a general security agreement (GSA). It sold that GSA to the interests of Gisborne man John Gardener.
The assets were then seized, the staff were told they were working for a new employer, and the eftpos machines in all the company-owned Jean Jones stores (two are franchised) were changed so that all bankings were diverted, the liquidator said.
When the Business Herald tried the phone lines of branches around the country most were disconnected and had not been relisted.
Gisborne chartered accountant Nigel O'Leary was an adviser to Michael Ward. He had been acting as a shadow director of the company, Montgomerie said. "Mr Ward had complete trust in him."
Montgomerie said he had not been able to get hold of the company's books and records, and had used the Companies Act to require that O'Leary hand them over. There had been no response.
"We're going to be having a bit of a fight with him," Montgomerie said. He believed the matter was headed for the courts.
O'Leary is now an adviser to John Gardener.
He declined to comment on the record. Neither Ward nor Gardener could be reached.
Ward put the original company, Michael Ward 1969 Ltd, into voluntary liquidation on May 7. Because the liquidators had not yet seen the books it hadn't been possible to work out what the debts were, Montgomerie said.
Auckland-based Wall Fabrics is owed money by Michael Ward 1969.
The Jean Jones stores continue to trade as normal despite the dispute.
