Honorary Consul of Lebanon in New Zealand, Henriette Nakhle MNZM, QSM, meeting Foreign Affairs Minister Winston Peters in 2024. <\/p>\n
A judge is now weighing whether the two companies should be liquidated or if receivership is a more appropriate step.<\/p>\n
The Nakhle famil<\/a>y have interests in a diverse portfolio of industries, including horse racing, property investment and quarrying.<\/p>\n They are also politically connected – National MP Rima Nakhle is a member of the family through marriage (she is not involved in the court action). <\/p>\n But the family\u2019s financial success has been marred by infighting and legal skirmishes, which has driven a wedge between mother and son. <\/p>\n Henriette and Daniel are directors of defendant companies, Karaka Estate Ltd (KEL) and Byerley Park Ltd (BPL), both linked to South Auckland thoroughbred racing facility Byerley Park.<\/p>\n Henriette, who is Honorary Consul for Lebanon in New Zealand<\/a>, claims the companies are \u201chopelessly insolvent\u201d. She has applied to the High Court to have liquidators appointed to conduct an independent investigation of their affairs. <\/p>\n But Daniel\u2019s lawyers say the companies\u2019 debts are disputed and there are no grounds to take the \u201cdrastic and final remedy\u201d of liquidation. <\/p>\n He says his family have reneged on the 2015 Curtis agreement that made him beneficial owner of the companies and their assets. <\/p>\n Daniel\u2019s lawyers this week said he has been pumping in his own money to pay creditors and is committed to ensuring the entities remain solvent. <\/p>\n The source of that funding was put under scrutiny at the High Court hearing before Justice Grant Powell.<\/p>\n Henriette fears Daniel is spending family money without authorisation for his personal use, and Justice Powell questioned how he was able to \u201cmagic up\u201d millions of dollars in a matter of days.<\/p>\n \u2018What is the ballpark figure?\u2019<\/p>\n Henriette\u2019s lawyer, Robert Stewart KC, told the court that BPL and KEL had incurred significant debts while under the effective control of Daniel, who allegedly used large advances from the family\u2019s Nakhle Treasury Trust to keep them afloat. <\/p>\n \u201cTo prevent the loss potentially getting any greater Mrs Nakhle has said no to any further distributions or advancements.\u201d<\/p>\n Henriette estimated Daniel had misappropriated up to $40m of the family\u2019s money, though admitted this was a \u201cbest guess\u201d and the actual figure \u201ccould be more\u201d, Stewart said.<\/p>\n \u201cWhat is a ballpark figure of what all this is worth?\u201d Justice Powell asked. \u201cI\u2019m just trying to get a feel for the scale of the enterprise.\u201d<\/p>\n Stewart replied: \u201cMy client doesn\u2019t know what she doesn\u2019t know. Efforts have been made to try and understand that but we\u2019re still in a situation where we don\u2019t have a full idea of what things are worth.<\/p>\n \u201cDaniel has run the companies how he wanted, effectively without any impediment or encumbrance from other family members.\u201d<\/p>\n After Daniel\u2019s father Elias stepped back from his role, Henriette became more actively involved in the family\u2019s financial affairs, Stewart said.<\/p>\n He claimed Daniel was irked because Henriette \u201cwon\u2019t do what I tell her to do\u201d, like his father had.<\/p>\n \u201cThere\u2019s clearly some annoyance and bitterness that Mum\u2019s not doing the same.\u201d<\/p>\n Quoting his client, Stewart said: \u201cYou\u2019ve used Treasury Trust funds for your own loss-making passion project and that\u2019s not fair.<\/p>\n \u201cYou\u2019ve taken assets solely for your own purposes and that has to stop.\u201d<\/p>\n Surprise revelation sprung on court<\/p>\n In a surprise development on Wednesday, it emerged that a new company half-owned by Daniel had been registered. That company, Ardmore Finance, had bought $7.5m in company debt from Westpac Bank in the 24 hours before the hearing.<\/p>\n Daniel\u2019s lawyer, Mark Sandelin, told the court the debt was owed by the family group, with the two defendant companies acting as guarantors. <\/p>\n Though the loans were due to expire, Sandelin said Ardmore was not going to take foreclosure action but had instead granted a three-month extension. <\/p>\n Justice Powell noted that the debt \u201cstill exists\u201d.<\/p>\n \u201cThe companies still owe that money but it is just a different creditor.\u201d<\/p>\n \u201cThat\u2019s correct,\u201d Sandelin replied. <\/p>\n Lawyer Daniel McLellan KC was also in court representing \u201csupporting creditors\u201d Roger and David Nakhle – Daniel\u2019s brothers – who were in the public gallery on Wednesday.<\/p>\n McLellan made forthright submissions after learning of the debt reassignment, labelling it a \u201cpretty desperate last-minute tactic\u201d designed to give Daniel \u201cleverage\u201d. <\/p>\n He said a letter sent by Ardmore to BPL and KEL directors on Wednesday morning set out terms for the three-month loan reprieve.<\/p>\n \u201cWhich in essence is a threat that if a court order is made placing the companies into liquidation then the loans will be called up. <\/p>\n \u201cIn my submission, this is a tactical last-minute play.\u201d <\/p>\n Stewart said the rest of the family were worried about how Daniel planned to continue funding the companies\u2019 losses. <\/p>\n Henriette believed he had no personal funds other than family money. <\/p>\n \u201cThe concern is that the funds that are being offered are funds that have been misappropriated, because there is zero information about where they come from, other than Daniel\u2019s assertion that they are from outside the group,\u201d Stewart said. <\/p>\n The judge also had questions for Sandelin, including as to how Daniel was financing the Westpac debt purchase. <\/p>\n \u201cDaniel has not provided any evidence about where he got the money from … [and] how he was able to just magic up $7m in the last week,\u201d Justice Powell said.<\/p>\n \u201cNone of that fills me with confidence. It almost makes me start to think some sort of investigation properly conducted by a liquidator would be appropriate.\u201d <\/p>\n In response, Sandelin said: \u201cI understand your Honour\u2019s point.\u201d<\/p>\n But he said his client was \u201cindependently wealthy\u201d and there was no suggestion the money was coming from \u201cfamily interests\u201d. <\/p>\n Sandelin said Daniel was committed to maintaining the companies\u2019 balance sheets and was prepared to pay for receivers. <\/p>\n Distributions from the family\u2019s Treasury Trust were \u201cproperly authorised\u201d with the full knowledge of his parents. <\/p>\n Asked by the judge how much was at stake in the case, Sandelin said the $60m in real estate Daniel claimed he was entitled to was roughly half the family\u2019s total assets. <\/p>\n Sandelin blamed Henriette for the deadlock with the two companies, saying her hands were \u201cunclean\u201d. She was trying to avoid her obligations as a director and her application to liquidate the companies was an \u201cabuse of process\u201d, he told the court. <\/p>\n \u201cAllegations of misappropriation, it should be very clear, are totally disputed by Daniel.\u201d<\/p>\n Financial feud divides family <\/p>\nSybelle Nahra Nakhle and Daniel Nakhle. Photo \/ Norrie Montgomery<\/p>\n
Justice Grant Powell questioned how Daniel Nakhle had been able to ‘magic up’ $7.5m in a matter of days. Photo \/ Jason Dorday<\/p>\n
Robert Stewart, pictured here during a separate case, is the King’s Counsel representing Henriette Nakhle. Photo \/ Peter Meecham<\/p>\n