Inland Revenue is fighting businesswoman May Wang's attempt to avoid bankruptcy.
Ms Wang, who is fronting a bid by a Chinese company to buy farms owned by the Crafar family, is facing bankruptcy over her failed Dynasty hotel company.
Ms Wang's lawyer has presented the court with a deal agreed to by most of her creditors to give them six cents for every dollar they invested.
If the court approves it, she could avoid bankruptcy.
But the Inland Revenue Department and another creditor, Latitude Asia, have objected to the proposal, forcing a judge to decide whether the deal will be accepted.
The Chinese-backed bid to buy the 16 Crafar farms is being considered by the Overseas Investment Office.
The office can take into account the conduct of anyone associated with the bid.
The bankruptcy hearing will resume in November.
