Mahana Estates Winery tipped into receivership

AUCKLAND: A highprofile Nelson winery has been tipped into receivership as its owner fights a lawsuit from a Las Vegas executive who allegedly threatened to bury him in the Nevada desert and kill his three show dogs.

Mahana Estates Winery, at Upper Moutere, was on the market but has asked its bank to appoint a receiver after a buyer failed to meet their first payments on a purchase.

Mahana has pinot noir, pinot gris, riesling, chardonnay, and sauvignon blanc grapes, as well as a winery, restaurant, and an upmarket guest lodge.

But Mahana’s director, Glenn Schaeffer, confirmed the bank will appoint KordaMentha as receivers, his local lawyer Rick Farr told the Herald.

Mr Farr said it was hoped that a further proposal for sale to an overseas interest would continue to be pursued.

Mr Farr said the business had been hit by the lawsuit Mr Schaeffer is facing and ‘‘that it became impossible and impractical to continue’’.

For the past three years, Mr Schaeffer has been battling a High Court lawsuit bought against him by James Murren and Daniel Lee.

Mr Murren is chief executive of MGM Resorts International, a multibillion dollar Las Vegas hospitality business, while Mr Lee is also the boss of a casino company in the same city.

The pair, in court documents, say they and others discussed forming a partnership with Mr Schaeffer in 2002 that would own a vineyard and winery.

They say Mr Schaeffer, who formerly headed the Mandalay Resort group in the US, sought capital contributions from them for the proposed partnership and when doing so either stated or implied that they were partowners of the Woollaston Estates Vineyard, which later changed its name to Mahana.

They allege that Mr Schaeffer, after 2008, made further representations to them that they were part owners of a vineyard and winery in New Zealand.

Mr Mullen says he and his trust paid Mr Schaeffer $US1.6 million ($NZ2.4 million). Mr Lee says he paid $US700,406.

They allege the representations made to them were false and the payments they made were not used to make the investments promised but for the assets he holds as a shareholder of New Zealand company Woollaston Estates Holdings.

The pair’s case alleges the representations breached the Fair Trading Act, that Mr Schaeffer breached a duty of care he owed and that he knew the representations were false.

A 10day hearing for the case is scheduled to begin next month.

Mr Schaeffer has made several bids this month to halt the action or delay it.

He alleges that last year Mr Lee threatened him.

‘‘He said if I did not give him back his money that he would bury me in the desert like in the old days, he would destroy my children’s lives and bankrupt my exwife and travel to Omaha to kill my three show dogs. He ended his threats with the words ‘give me my f***ing money’,’’ Mr Schaeffer alleged Mr Lee said.

Mr Lee denies threatening Mr Schaeffer’s family or show dogs and Mr Murren supports Mr Lee’s recollection .

Mr Schaeffer applied to halt the lawsuit on the basis that the alleged threats meant he could not adequately defend the proceedings and was unfairly constrained because he feared repercussions.

But the Court of Appeal yesterday refused another bid to stop the proceedings.