Today, Allied Farmers is focusing on their livestock business. Photo / File
Allied Farmers says it could be in the money if litigation against former bankrupt Dave Henderson's Property Ventures group is successful.
In 2013, the Hawera-based rural services firm sold various loans that it had written down to zero for $100,000, with the possibility of that rising to $500,000. At the
time, it declined to name the buyer or the outcomes that would trigger a top-up payment. Today, it said the deal was with a unit of litigation funder LPF Group, which is backing liquidator Robert Walker's suit against Property Ventures directors and auditor PwC.
"If the company's litigation is successful, ALF is entitled under the terms of the deed of assignment to a proportion of any net proceeds of that litigation (that proportion being confidential)," Allied chairman Garry Bluett said. "Highlighting the difficulties of predicting the outcome or the final quantum and the inherently risky nature of litigation, the liquidator has advised that, if successful, the final quantum will be higher than that predicted in 2013, and accordingly that ALF may be entitled to a substantially greater amount than $500,000."
The suit reached the Supreme Court last month, with Property Ventures' auditor PwC seeking to have the proceedings stayed until the court was satisfied it wasn't an abuse of process. The claim for between $240 million and $320m made in 2014 was accruing a 20 per cent interest compounding monthly, and PwC's counsel Bruce Gray QC told the Supreme Court it could top $1 billion by the time the trial starts next year.
Allied Farmers took on the loans in its ill-fated 2009 acquisition of the Hanover and United finance group's loan book that wasn't worth as much as initially thought. Allied Farmers has largely sold the residual assets of those loans and is focusing on its livestock business.
