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MARIA RAE Law reporter
June 03, 2008 12:00am
A JUDGE has given the green light for controllers to sell off the embattled Hartz mineral water business.Justice Peter Evans yesterday dismissed a Supreme Court application by Hartz owner Stephen Powell for an injunction to halt the sale of the company. "It seems to me that delaying a sale may diminish the value of the business as ongoing uncertainty may cause staff to leave," Justice Evans said in his judgment on the application. He also said it would give Hartz competitors the chance to make inroads into its business. Investment firm Business Expansion Capital Pty Ltd (BE) appointed controllers to manage Hartz in April, less than seven months after it loaned $600,000 to the company. The managing controllers, who claim Hartz broke the terms of the loan agreement, are in the process of selling the company to recoup their loan and a risk fee of at least $600,000. The controllers wanted to sell the company last month and say there were several interested buyers. But Mr Powell applied for the injunction when a court trial -- in which he is arguing to have a loan agreement he signed with BE rescinded -- went over time. Justice Evans also said in his judgment it was a contradiction to make an order that stops BE from selling but puts pressure on BE to continue its controllership of the business. "Whilst I realise that BE could simply walk away from the controllership, I cannot see how this would be a benefit," he said. "On the evidence before me it seems that if BE walked away, another creditor would step in and force a sale of the business." The judge also said the injunction would not mean the difference between Mr Powell keeping Hartz and Hartz being sold. "The thrust of the evidence is that for some time the plaintiffs have recognised that the business had to be sold," he said. Justice Evans said the difference was Hartz being sold by Mr Powell, BE or other creditors. He said he also considered it significant that the injunction sought was in relation to the sale of a going concern rather than a fixed asset like real estate.
June 03, 2008 12:00am
A JUDGE has given the green light for controllers to sell off the embattled Hartz mineral water business.Justice Peter Evans yesterday dismissed a Supreme Court application by Hartz owner Stephen Powell for an injunction to halt the sale of the company. "It seems to me that delaying a sale may diminish the value of the business as ongoing uncertainty may cause staff to leave," Justice Evans said in his judgment on the application. He also said it would give Hartz competitors the chance to make inroads into its business. Investment firm Business Expansion Capital Pty Ltd (BE) appointed controllers to manage Hartz in April, less than seven months after it loaned $600,000 to the company. The managing controllers, who claim Hartz broke the terms of the loan agreement, are in the process of selling the company to recoup their loan and a risk fee of at least $600,000. The controllers wanted to sell the company last month and say there were several interested buyers. But Mr Powell applied for the injunction when a court trial -- in which he is arguing to have a loan agreement he signed with BE rescinded -- went over time. Justice Evans also said in his judgment it was a contradiction to make an order that stops BE from selling but puts pressure on BE to continue its controllership of the business. "Whilst I realise that BE could simply walk away from the controllership, I cannot see how this would be a benefit," he said. "On the evidence before me it seems that if BE walked away, another creditor would step in and force a sale of the business." The judge also said the injunction would not mean the difference between Mr Powell keeping Hartz and Hartz being sold. "The thrust of the evidence is that for some time the plaintiffs have recognised that the business had to be sold," he said. Justice Evans said the difference was Hartz being sold by Mr Powell, BE or other creditors. He said he also considered it significant that the injunction sought was in relation to the sale of a going concern rather than a fixed asset like real estate.
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