Investors in the managed investment schemes run by collapsed timber group Gunns are mounting a challenge to the appointment of voluntary administrators PPB Advisory, in a bid to protect their interests in hundreds of millions of dollars of timber plantings. Source: The Australian
The investors claim PPB is conflicted in its role as voluntary administrator of both the forestry group and of Gunns Plantations, that ran the MIS business on behalf of an estimated 40,000 individual investor/growers.
The push to change administrators is the first move in what is expected to a complex process of resolving the schemes, with investors already running class actions against collapsed scheme operators including Great Southern, Timbercorp, Willmott Forests, Rewards Projects and FEA Plantations over alleged disclosure failings.
Investors in later schemes, where the trees are further from maturity, are most at risk of suffering losses, according to class action lawyer Ron Willemsen of M+K Lawyers.
The Great Southern Growers Group is circulating a letter hoping to gather proxies from growers to install BRI Ferriers rather than PPB at the first creditors meeting next week.
“The administrators of plantations have obligations to growers which are likely to conflict with their obligations to other creditors of Gunns,” the group said in its letters.
“PPB is presently the administrator of both companies and is therefore in a position where a possible conflict may arise.”
PPB declined to comment but has pushed back the date for the first creditors meeting.
Ten lenders led by ANZ bank-appointed Korda Mentha as receivers over 36 companies, including Gunns Plantations, to recover around $400m in senior loans ahead of any claims by other creditors represented by PPB.
The receivers and administrators will have to make assessments about 21 separate MIS schemes where Gunns was the responsible entity, including nine schemes launched between 1998 and 2006 and sold to Gunns following the collapse of Great Southern in 2009.
Untangling the claims would be complicated because, depending on the scheme, Gunns could be an investor, financier, manager and customer of any of the plantations.
Gunns said the value of its interest in the Tasmanian MIS was negative $101m, meaning the cost to the company in funding the leasing and management of the plantations was greater than the value of expected proceeds.
