Their first blunder was to pull the pin on Maria’s Farm Veggies without offering farm debt mediation, as the law requires.
Their second was to refuse to pay creditors. So it was that the furious glass-house builder retreated to Holland and left the project in the lurch.
Their third blunder was to look downright silly by claiming, via their lawyers Baker and McKenzie, that Maria’s Farm – though it grew veggies, had “Farm” in its name and a farm mortgage to be financed by the sale of tomatoes and cucumbers was … wait for it … not really a farm.
Now Macquarie Bank, Al Gore and KordaMentha have a lawsuit heading their way. A judge in the NSW Supreme Court last week declined to validate KordaMentha’s appointment as administrator to Maria’s Farm Vegies. They had sought a declaration from the court that the appointment of David Winterbottom and Rahul Goyal was valid and were refused.
The matter heads back to court next week. Meantime, the silly claims continue. They seem to have given up claiming a farm is not a farm but are persisting with their idea that appointing voluntary administrators to Maria’s Farm did not constitute an “enforcement action”.
Under the Farm Debt Mediation Act (NSW), an enforcement action (such as a bank enforcing its security by appointing receivers and managers) cannot take place until there has been mediation.
It seems the bankers are arguing that appointing a voluntary administrator is not an enforcement action. If the judge accepts this sophistry, every banker in the state will appoint VAs instead of receivers to get around the Farm Debt Mediation Act.
In the case of Maria’s Farm of course, it was the lure of a $25 million insurance payout which appears to have enticed the accountants from Sydney to run with a VA (bestowing control of not just the asset as security but of the whole company too).
Project delays are running into the millions of dollars, the builder has gone, 120 refugee workers have been let down, the administrators have borrowed another $2.2 million and now their very appointment is on the line.
Macquarie offered to conduct farm debt mediation this afternoon – five months after the fact, five months too late. It was rejected and the bank was notified they would be sued for trespass.