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An agribusiness lending company is in a High Court battle with the banks over who owns a herd of cows formerly owned by the collapsed Crafar family farming empire.
In October last year Michael Stiassny and Brendon Gibson of KordaMentha were appointed receivers of a number of Allan Crafar companies.
The companies owned 16 farms that are up for sale, with the UBNZ/Natural Dairy bid for the farms awaiting Overseas Investment Office approval.
The receivers have gone to court on behalf of Westpac, which acted as an agent for the banking syndicate of Crafar lenders that also included Rabobank and PGG Wrightson.
They claim Plateau Farms breached a general security agreement (GSA) when it sold livestock to StockCo, a specialist stock financing company whose directors include former Fay Richwhite high-flyer Martyn Reesby.
Queen’s counsel Bruce Stewart, the lawyer for the receivers, said today the deal in question was a sale of 4000 heifers to StockCo for $3.2 million.
He said the sale was driven by Mr Crafar’s urgent need for money to fund a farm purchase by Nugen Farms, a company owned by a family trust associated with Mr Crafar’s son Robert.
Nugen Farms, which wasn’t one of the four companies covered by the GSA, is separately in receivership and liquidation.
Mr Stewart said the basis of the receivers’ claim is that Plateau Farms needed to get permission from Westpac before the sale went through.
Westpac, he said, probably wouldn’t have approved it because it would have wanted any sale proceeds to be used to pay down debt rather than buying new farms.
The question to be determined by Justice Douglas White is whether the sale of the cattle was in the ordinary course of business for the Crafar group of companies.
The hearing is set down for nine days.