NERVOUS growers concerned about the potential for the administrators of Lempriere Grain to try and take back thousands of dollars paid to them under clawback provision in the Corporations Act will likely look to a good faith clause in the rules.
Administrator Jirsch Sutherland mentioned the possibilities of clawback provisions in another grain trade case it was involved in, the winding up of NSW-based Special One Accumulator, a subsidiary of Walgett Special One.
Solicitor Patrick Smith, O'Brien Lawyers, Horsham, confirmed that under the Corporations Act, creditors that have been paid in the past six months could be forced to pay the money back under 'unfair preference' rules.
Mr Smith said the rules related to payments made when the company was insolvent.
The industry as a whole was caught on the hop with the news of Lempriere Grain getting into trouble, with grower creditors speaking to Fairfax Agricultural Media all saying they had no idea the company was facing difficulties.
They have said they are concerned they may come under fire as the administrators try to satisfy the secured creditors first.
However, Mr Smith said most growers would likely argue a good faith defence.
He cited a section of the Corporations Act that said the court is not to make an order to reclaim payments if a creditor can provide it had been a party to the transaction in good faith and had no reasonable grounds to suspect the company was insolvent.
Growers have been advised to seek legal advice, especially in the event they are asked to repay any money.
Meanwhile, further jitters have been sent through the industry with southern Australian growers reporting slow payments from other grain buyers.
However one grain buyer contacted by Fairfax Agricultural Media, who we have chosen not to name, while acknowledging payment had slipped past terms said it was a case of waiting for big customers of the company to settle their own accounts before they were able to pay growers in full.
He said that while it was not ideal for growers they should not be concerned about the health of the business.
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