The owner of Southern Cleaning Services has until next Friday to pay the company's founder $92,000 owing on the purchase price of the business price from two years ago - or potentially face insolvency proceedings under the Companies Act.
Wellington-based Greg Thomas, the sole director and majority shareholder of Broadbat Ltd, bought Southern Cleaning Services from Dunedin businessman Glenn Campbell in August 2006 for an undisclosed sum.
Mr Campbell is considering making an application to have the business placed in liquidation in the High Court at Dunedin if the debt is not paid.
Mr Thomas could not be contacted yesterday and did not return calls.
The cleaning company, which employs about 120 people around the country but mainly in Otago, is mired in a litany of claims and is under investigation by the Inland Revenue Department and Department of Labour over allegations of tax anomalies.
Minister of Labour Trevor Mallard has asked for a briefing.
Dunedin-based legal counsel for Mr Campbell, Dean Tobin, confirmed yesterday that part of the sale agreement was Mr Thomas had the right to use the name Southern Cleaning Services and that the purchase included a $92,000 part-payment, due after the sale went through.
Mr Tobin said despite a settlement being negotiated, the payment had not been made.
Mr Campbell had made a statutory demand for payment, under the Companies Act. Mr Thomas challenged that demand in the High Court at Dunedin, before Associate Judge Tony Christiansen, on Monday.
Mr Tobin said the claim of Mr Thomas, to have the statutory demand dismissed, was set aside by Judge Christiansen, because there had been a negotiated settlement.
The judge extended the compliance period of the statutory demand against Mr Thomas - meaning he had until August 15 to make the part-payment of $92,000, or face insolvency proceedings under the Companies Act.
Mr Tobin said if the payment was not made by next next Friday, Mr Campbell was "seriously considering" making an application in the High Court at Dunedin to have Mr Thomas' company Broadbat placed in liquidation to recover the money.
National MP Katherine Rich, of Dunedin, has logged about 120 calls from Southern employees who have concerns about sick pay, holiday pay and that other payments may not have reached IRD for PAYE, KiwiSaver, student loans and child support statements.
When contacted yesterday, she said had spoken to Minister of Labour Trevor Mallard, who had "moved quickly" to order a report.
She had been in contact with IRD and the Department of Labour.
