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Finance company St Laurence has stopped repaying principal investments ahead of a vote on a scheme of repayment due to be held late this month.
Last Tuesday, the company announced it had decided to exit from money lending and was withdrawing its prospectus.
But at that point it had intended to continue making repayments until the moratorium was voted on.
Managing director Kevin Podmore said the company had now halted repayments of principal.
That followed legal advice received on Monday which said all debenture holders needed to be treated equally and fairly.
St Laurence is to try to put in place a scheme where its 9000 debenture holders, owed around $240 million, will only get repaid in instalments while still receiving interest payments.
Podmore said the decision to exit lending came out of a meeting that initially had been held to consider amending the prospectus.
Because the decision was so sudden, St Laurence had not been able to plan for it, he said.
"We've been running pretty hard to get everything in order."
Interest due on July 1 had been paid to investors, and the company had also paid out to investors with compound interest investments for the quarter ending June.
- NZPA
