I too have read the Environinvest case but disagree totally with...

I too have read the Environinvest case but disagree totally with your central contention that scheme assets can be used to satisfy secured creditors. This is just wrong. What was found was that the schemes were non viable , due to very poor growth, and should be wound up with the proceeds from the windup distributed to the growers. Given the poor growth rates this wont be very much. As for the secured creditors the advantage they get through wind-up is the ability to access the underlying land security and sell it on the open market which they could not have done if the schemes were viable. I have spoken to CBA which is involved in all of these schemes and they agree that the process is to sell the land and the trees together and then apportion value between the trees and the land. The problem for a grower with a 1-5 year old tree is that it is not worth much but a tree closer to maturity will get closer to fair value in which case the grower wont lose much.

But your central contention of the finding in the case is just wrong! If you dont agree show me the section in the judgement where it says that the secured creditors have rights over scheme assets. I just dont believe it to be the case...

This is not to say that I disagree with your view that the growers will lose a lot, they will. But the legal conclusion you draw is wrong.Posted by lordolean, Tuesday, 16 June 2009 10:47:05 AM