Property Finance Securities and its trustee are to square off in court, as the troubled lender fights to put its case for a revised moratorium to investors.
The company, a subsidiary of the listed Property Finance Group, went into receivership in August 2007 owing $79 million to about 2,400 investors, but resumed trading in February last year.
Property Finance Securities has applied for a High Court injunction to stop Convenant Trustee Company Ltd calling in the receivers before it has held a meeting for stockholders to vote on revised moratorium.
It wants stockholders to accept a lower interest rate, reducing it from 9.33% to 2% above the Reserve Bank's Official Cash Rate, currently at 3%.
Property Finance Securities says stockholders should have the right to decide whether to approve its proprosal.
The company has also run into trouble with the Securities Commission, which banned its advertisements about the proposal, saying they were likely to mislead investors because they detail only the positive aspects of the proposal and the negative of receivership.
Convenant Trustee Company declined to comment as the case is now before the court.