The issue arose when Dunedin-based Rodgers Law, which used to represent Ms Carlson's company, applied for yesterday's hearing to have a two-year-old debt of $4135 paid; the outstanding amount from an original $5800 bill.
The debt had not been disputed and Ms Carlson always said she intended paying the debt.
During the submission, legal counsel for Rodgers Law told Judge Osborne the debt and costs had been paid and confirmed the liquidation application was otherwise "discontin-ued".
Ms Carlson was not represented.
Her company, Carlson Ltd, was now only used to service existing bank debt.
Ms Carlson's successful Carlson label, with outlets in Dunedin, Wellington and Auckland, otherwise traded under TC Ltd.
She said last month the application would have no affect on the Carlson fashion label, which had been operating since 1997.
