NEQTAR RECEIVERS BITE HARD
The receivers for the failed Neqtar Wines have this week made demands on as many as 20 Murray Valley growers for the repayment of wine grape payments made on 2009 vintage grape deliveries – just short of 3 years after the failure of Neqtar. After discussions yesterday with the receivers, Bent & Cougle, MVW Chief Executive Mark McKenzie said millions of dollars in grower grape payments was being demanded to be repaid to the receivers.
The principle bases of the receivers’ demands are that the growers targeted in this recovery action had gained preferential payment terms, and that the growers had supplied Neqtar in the knowledge that the company was trading while insolvent. MVW understands that the basis of the first claim is that a number of growers’ debt position for 2009 deliveries fell steadily in the 6 months prior to the company being wound up as progressive fruit payments were made, while other monies owed to some growers by the company increased or did not reduce. The basis of the second claim by the receivers is that the failure by the company to pay the last payment to growers for 2008 fruit deliveries proved that it was trading insolvent and this should have been recognised by the growers. MVW understands from discussions with a number of affected growers that Neqtar acknowledged cash flow difficulties in its failure to pay the final 2008 payment on time but had reached extended payment terms with growers for the payment of the balance of 2008 monies owed, and on this basis growers continued to supply fruit to the company in 2009. As to any foreknowledge that Neqtar was trading while insolvent, it is a stretch to assert that a late payment proved insolvent trading, and that growers who were subsequently part paid for 2009 deliveries before the company’s collapse would have known or suspected that the company was insolvent, particularly as Neqtar’s failure in June 2009 was a direct result of its Iceland based bank financiers withdrawing the company’s commercial credit facilities post-GFC. While the directors of Neqtar may have been aware of any funding difficulties being experienced, growers can rightly argue that they were not privy to any such information, and if there were reasonable grounds to suspect that Neqtar was insolvent no grower would have entered into extended payment terms for the final 2008 fruit payment or delivered grapes to the company in 2009.
The receivers appear to have targeted larger growers in this action, indicating that the average demand for repayment is between $100,000 and $200,000. MVW is aware of one demand for the repayment of over $400,000 and another for $200,000. While Bent & Cougle acknowledged that the long delay in this process is unfortunate, under the Corporations Act the receivers do have the legal right to make demands for repayment of monies paid to suppliers up to 6 months prior to the failure of a company where there is an implication of trading while insolvent and preferential treatment in the payment of creditors.
Urgent Next Steps
Affected growers SHOULD NOT – UNDER ANY CIRCUMSTANCES – IGNORE THEIR LETTER OF DEMAND, and MUST RESPOND AS A MATTER OF URGENCY.
MVW STRONGLY RECOMMENDS THAT YOU CONFER WITH A LAWYER to respond to this demand on your behalf. If you do not have a lawyer advising you already on commercial issues, Mildura law firm Maloney Anderson Legal are now acting on behalf of a group of affected growers and are offering to do so for any others – which may result in lower individual costs to those involved. If anyone wishes to discuss participating in this group response to the receivers they should contact either Leigh Anderson or Peter Maloney at Maloney Anderson Legal on (03) 5021 6248.
MVW can provide initial advice to affected growers regarding their recommended next steps. Contact Mark McKenzie at the MVW Office on (03) 5021 3911.
