A last-minute bid to stop a series of Gunns grower meetings failed, despite a court finding there was a strong argument that documents supporting a Macquarie Group-led restructure could be false and misleading. Source: The Australian
KordaMentha, the Gunns receiver, sought an urgent Victorian Supreme Court injunction ahead of the meetings, which will consider Macquarie’s bid to take control of a $500 million portfolio of nine Gunns managed investment schemes.
Judge Tony Pagone rejected the application, saying that, on the balance of convenience, the meetings should proceed. However, if the restructure attracted the required majority support, which seems likely, he said Macquarie would have to convince the court that it was a clean deal and the growers had not been misled.
After the court ruling, a spokesman for Gunns Growers Group, which strongly backs the Macquarie restructure, condemned the receiver’s intervention.
“We think KordaMentha and (Gunns liquidators) PPB Advisory are trying everything they can to scuttle the restructure, but it hasn’t worked,” he said.
“We’re very upset at this last-minute effort to injunct our meeting.”
The growers, he said, were confident that all the issues raised by KordaMentha in court had been addressed.
Macquarie has called meetings for the 2002-08 schemes where it is seeking to become the overall manager and install a new responsible entity, WA Blue Gum. The present RE is Gunns Plantations, which is in liquidation.
Macquarie has said it will avoid a fire sale of the scheme assets but will “test the market” by asking for bids from institutional buyers across the remainder of this year.
If a cash bid is received, growers will be asked to vote on accepting the offer or seek to improve returns by continuing the schemes to harvest.
In an affidavit sworn for yesterday’s hearing, KordaMentha partner Bryan Webster said there were a number of deficiencies in the material supporting the Macquarie restructure.
The defects, he said, made the material “misleading and deceptive or likely to mislead or deceive”.
Webster said an amending deed to the constitution of the schemes had not been made available to growers by May 20, and he had asked his lawyers to request a copy. When he got a copy, Webster said he saw proposed amendments that would give effect to “an unlimited personal indemnity” by each grower.
“The personal indemnity is a new indemnity that provides the new RE with unlimited recourse to all of a member’s assets,” the affidavit said.
This means that it is now possible for members to lose all their initial investment, in addition to becoming personally liable for the new RE’s costs. The GGG spokesman said his group included some high-profile lawyers and they had not been concerned about the proposed constitutional changes.
