Given Crafar's own indication that the family's equity is under pressure, the question must be asked: Why are the bankers not stepping in to manage the process themselves given the continuing run of revelations which must be damaging the value of the CraFarms' interests?
This is exactly the question which is exercising the minds of ministers like David Carter - who has the agriculture portfolio - after this week's revelations by interest.co.nz that an agriculture inspector recently had to shoot dying calves at one of CraFarms' properties after alleged neglect by farm staff.
The problem is that CraFarms has proven to be a serial recidivist.
In 2006, the company pleaded guilty to neglecting dozens of cows at its Hawkes Bay farms. It has also previously been in the gun over leaking effluent systems.
Judging by the rambling performance Crafar himself gave on National Radio this week, he is stressed to the max and is finding it difficult to run a widely dispersed business.
Yesterday, Fonterra chairman Henry van der Heyden said animal cruelty would not be tolerated by New Zealand's largest milk processor. Fonterra is now under political pressure from the Greens, which want the co-op to refuse to take milk from CraFarms.
But the co-op will not be taking any retaliatory action against the Crafer interests until/unless a prosecution is proven.
Carter has called on his Ministry of Agriculture and Forestry officials to present him with an urgent report on exactly what happened at CraFarm's Benneydale dairy farm, whether it was an isolated incident and whether a prosecution is justified.
In the meantime, neither Fonterra nor the Government will go down a path which will simply cause physical harm and discomfort to the Crafars' cows.
The Government is looking to a "more proactive" stance from CraFarms' bankers - semaphore for take charge of the disposal process. But it also has weapons of its own which it should be considering now.
One of the issues confronting bankers - who already have huge dairy exposures on their books - is the "mark to market" effect on their loans books if the farms go at a savage discount.
The Government faces different imperatives. The prime one in this case is the public interest in ensuring that New Zealand's 100 per cent Pure brand is not irreparably damaged by images in the video (now on YouTube) which shows dying calves piled up alongside fences. Add this to the "dirty dairying" image which was spawned by unacceptable effluent pollution and the capacity for this country's prime agriculture export industry to suffer brand damage is immense.
The Government could orchestrate statutory management under the Corporations (Investigation and Management) Act 1989. This is usually done by the Minister of Commerce following a recommendation from the Securities Commission. The commission says the act can apply to any corporation - which means any group of people incorporated or not and can include a company, a group of companies and some types of trusts. It is a measure of last resort and (among other things) applies to a corporation that may be operating recklessly, or, if the public interest needs to be preserved.
If the Government believes CraFarms has operated recklessly and there is a public interest in ensuring the country's biggest dairy farmer does not blight the reputation of the dairy industry, then it should move quickly. Appoint statutory managers to the company, who can orchestrate the orderly disposal of the 22 farms into the hands of well-capitalised owners.
If the banks want to maintain control they would be advised to move first.
