Gt Southern stalemate leads to wind-up 17-December-09 by Jonathan Barrett
Great Southern receiver McGrathNicol has opted to wind up the olive schemes operated by the fallen agribusiness company after failing to overcome a stalemate with two of the biggest names in Western Australian horticulture.
In a blow to out-of-pocket investors, McGrathNicol released a circular announcing that the olive schemes would be wound up, citing no viable alternative.
It is understood that the receiver would not agree to terms contained in a proposal to develop the schemes by Kailis Organic Olive Groves and Sumich Olive Group of Companies. The proposal was subsequently withdrawn.
Mark Kailis, who headed the proposal, could not be reached for comment.
Kailis managed more than 70 per cent of Great Southern's 2400 hectares of groves in WA, with the remainder managed by Sumich. The Western Australian companies also owned all of the assets such as tractors and sprayers.
McGrathNicol, which was appointed by a banking consortium to look after its multi-million dollar creditor interests after the collapse of Great Southern, has been accused of putting the interests of creditors ahead of investors.
Land that is unencumbered - property that does not have assets that must be brought to harvest - is worth more than land with contractual obligations, and therefore there is a potential incentive to wind projects up.
A Great Southern spokeswoman said the receiver had nothing to add that wasn't in the circular.
The receiver noted in the circular that it had engaged an independent consultant and that a review of the schemes showed that the funding requirements and the costs of producing an olive harvest might not be commercially viable.
Great Southern operated 45 forestry, horticulture and cattle managed investment schemes on behalf of more than 40,000 investors before it was felled by a mountain of debt and placed in administration and receivership in May.
Olive investors can expect to receive some of the proceeds from the sale of the olive assets, although determining the amount could be subject to negotiation and/or legal action.
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