Farmer-owned wool promotional company Wools of New Zealand (WONZ) has been served notice of legal action in the middle of its capital-raising campaign.
The company has just finished more than 40 farmer meetings around the country, asking farmers to invest up to $10 million to help market and sell strong wool, with the aim of improving the long term returns back to the farm.
Wellington product development company The Formary filed proceedings in the High Court in Wellington last week against UK-based weaving company Camira Fabrics, with Wools of New Zealand as second defendant.
The Formary managing director Bernadette Casey says it relates to the new upholstery fabric the company developed two years ago, combining wool with jute from recycled Starbucks coffee sacks.
She says Camira Fabrics and Wools of New Zealand were partners in producing the WoJo fabric.
Wools of New Zealand chair Mark Shadbolt says he cannot comment in detail on the matter but is frustrated at the timing of the legal action.
Ms Casey says the timing was dictated by the time taken to get legal proceedings in place and delays in that process, and has nothing to do with the WONZ capital raising.
She says The Formary has established a new supply chain and the fabric will go into the commercial and domestic market early next year.