We were recently appointed liquidators of a company which runs a dairy farm on indigenous owned land. Now, in any normal day, that’s probably not too extraordinary, nor is it that unusual to find that the records of the company are, not to put too fine a point on it, appalling.
So, what are the issues?
- The company owns what we believed to be 200 plus head of dairy cattle which have had their identity tags removed.
- We’re receiving claims, by competing interests, to 100 head of dairy cattle allegedly supplied to the company some 15 years earlier, although no credible evidence has yet been provided to substantiate this.
- We’re dealing with livestock, and thus their overall health and security, so if there is a legitimate claim to ownership from 15 odd years ago, the question is, how many cattle are still alive? Who knows? We have found no reliable records.
- The competing parties have not registered their interest on the PPSR and we have a myriad of land rights issues.
Ordinarily, we would simply secure the asset, which is the livestock. However, this may not be so straight forward when we’re not permitted on the land (for political reasons).
We have of course sought information from all of the competing interests to prove their claim to ownership of the livestock asset, and any other assets which are owned by the company, but nothing concrete has been provided thus far.
If insufficient proof is provided, the Corporations Act permits a liquidator to sell assets that appear to belong to the company. This of course, is now supported with the introduction of the PPSA.
Interestingly, we are now receiving information from a number of sources to suggest that approximately half of the livestock ,about 100 in total, have mysteriously disappeared, but, we cannot validate those claims at this stage, because we’re not permitted on the land and those that may know, don’t know, if you know what I mean…
So what can we do?
Well practically speaking, we have sought the assistance of the police and have engaged security to roam the perimeter of the property to ensure no other cattle go missing.
In the interim, we are working towards striking a deal with the competing interest to settle all claims on a commercial basis, which should result in a likely 100% return to creditors, if a heap of money is not needed to be spent dealing with the ton of allegations and claims of theft.
So, what’s the moral of the story?
Attempting to strike a commercial deal with all competing interests may be the only way to salvage any prospect of providing for a return to creditors, particularly when there are politically influenced competing interests involved.
Liquidators need to be persistent in their attempts to recover assets; but they also need to be practical, realistic in facing challenges, and commercial when engaged in negotiations.
We will keep you advised of developments!