Pay up, Scha­ef­fer told

Court backs US in­vestors in Ma­hana Es­tates win­ery dis­pute

Nelson Mail - - Front Page - Saman­tha Gee saman­[email protected]

Ma­hana Es­tates win­ery owner Glenn Scha­ef­fer has been or­dered to pay $3.3 mil­lion after a judge found he mis­led United States in­vestors.

The former casino de­vel­oper was sued by former friends, Las Ve­gas en­ter­tain­ment ex­ec­u­tives James Mur­ren and Daniel Lee, who in­vested in the Nel­son busi­ness.

Jus­tice David Collins re­leased his de­ci­sion on Wed­nes­day, find­ing that Scha­ef­fer made neg­li­gent mis­state­ments to Mur­ren and Lee about their in­vest­ments, for which he was li­able for the dam­ages sought.

Scha­ef­fer was or­dered to pay Mur­ren US$1.6m (NZ$2.3m) and Lee US$700,000 (NZ$1m), plus in­ter­est.

The long-run­ning High Court case con­cluded on Novem­ber 7. At the hear­ing, both men said Scha­ef­fer had dis­cussed with them a part­ner­ship to own a vine­yard and win­ery in 2001 and 2002, and he had asked for cap­i­tal con­tri­bu­tions from Mur­ren, Lee and oth­ers. It was ei­ther stated or im­plied that they would be par­town­ers of the Wool­las­ton Es­tates vine­yard, which has since changed its name to Ma­hana.

Mur­ren and Lee claimed that rep­re­sen­ta­tions made to them were false and that they did not re­ceive an in­ter­est in the vine­yard and win­ery.

They said their pay­ments were not used to make the in­vest­ments promised, but were in­stead used by Scha­ef­fer to ac­quire as­sets that he now held as a share­holder of his com­pany.

Mur­ren and Lee brought four causes of ac­tion against Scha­ef­fer, and suc­ceeded in their di­rec­tion for re­pay­ment of their money plus in­ter­est as well as breaches of the Fair Trad­ing Act and the Ne­vada De­cep­tive Trade Prac­tices Act.

At its peak, the vine­yard was spread over sev­eral sites and com­prised more than 100ha of land in and around Moutere and Hope. The vine­yard build­ings in­clude a four-level, grav­ity-fed win­ery with a restau­rant and re­cep­tion and a villa, which is de­scribed in ad­ver­tis­ing lit­er­a­ture as ‘‘fea­tur­ing seven bed­rooms, seven bath­rooms, wine cel­lar, li­brary and art gallery’’.

The vine­yard was placed into re­ceiver­ship in Septem­ber, and the win­ery, cel­lar door and events venue are cur­rently for sale as part of the re­ceiver­ship process.

Two other as­sets, a 9ha vine­yard in Hope and an up­mar­ket lodge on the Ma­hana prop­erty, are be­ing sold by Scha­ef­fer.

In Septem­ber, Scha­ef­fer went to the High Court, seek­ing to have the case struck out be­cause of a threat made by Lee dur­ing a me­di­a­tion hear­ing in Au­gust last year.

Scha­ef­fer al­leged Lee said ‘‘he knew where I lived, knew where my fam­ily lived and knew where my dogs lived’’.

‘‘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 ex-wife and travel to Omaha to kill my three show dogs. He ended his threats with the words, ‘Give me my f ..... g money’.’’

How­ever, the judge ruled that the threats were a dis­trac­tion from the main is­sues at stake.

ALDEN WIL­LIAMS/ STUFF

Ma­hana Es­tates win­ery owner Glenn Scha­ef­fer has been or­dered by the High Court to re­pay $3.3 mil­lion to two former friends who in­vested in the busi­ness.

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