Crafar claims damages, farms 'mismanaged'

Allan Crafar. Photo / Herald on Sunday

Allan Crafar's court bid to block the sale of his farms has failed, but
a damages claim against the receivers could still be pursued.

Crafar will seek damages against the receivers and the banks if they accept a lower offer for the farms, than what he might be able to come up with.

Justice Harrison said in court it was doubtful whether the Crafars' claim against the banks and the receivers had any legal factual basis, nevertheless to "preserve the Crafars' rights" he would adjourn the proceedings.

The Crafar company Plateau Farms applied for an urgent interim injunction against receivers KordaMentha and creditors of the farms which was dismissed in the Auckland High Court today.

Crafar has been given until August 6 to file an amended statement of claim, when he must also put up $50,000 as security for costs.

Crafar said he's unsure what his next move will be after the High Court ruling this morning.

"I haven't had the chance to discuss with anyone what our future moves will be, but I don't think the injunction is the be all and end all," he said.

Crafar maintained he was confident he could solve all his problems, I just need "come up with the money".

"It's not my hold-up, it's just the way the funders can do it," he said.

The Crafars have offered $216 million to "redeem or purchase" the farms - being the amount of the "alleged bank debt".

The Crafars said they could pay 10 per cent of the purchase price by the end of this month and the balance by October 30.

Crafar told Radio New Zealand today he had financiers willing to help.

"I've made an offer that was a good offer, and that's where it stays as far as I'm concerned. I've got more than one option for funding. I've got some good people willing to help."

Receivers KordaMentha said they would "vigorously defend" any claim of damages made by the Crafar family.

Today the lawyer representing KordaMentha wished the Crafar family the "best of luck" in coming up with the $50,000 security.

"They've got an opportunity before the court strikes it out to put forward a fresh claim before August 6," said Bruce Stewart.

"If they can't put $50,000 up by August 6 the claim is stayed and it goes no further. I don't know if the sale process will be complete by then, but they will be in the queue with everyone else if they want to buy back the farms," Mr Stewart said.

He said he did not know how many other parties were interested in buying the farms.

"I wish the Crafar family the best of luck," he said.

The allegations made in the statement of claim by the Crafars include:

* The receivers have turned away prospective purchasers, "particularly those who had shown any interest in assisting or later working with the Crafars as funders or engaging them to manage their properties".

* Poor stock management and inhumane practices including; failing to attend to bloated cows left in the paddock and bobby calves killed in front of their mothers in the paddock with a hammer.

* The shared lenders and the receivers had acted in an oppressive, harsh, unjustly burdensome, unconscionable manner.

* The receivers dismissed capable staff, replacing them with people considered to be lacking the necessary capability.

* The receivers have allowed productivity to drop by between 20 and 30 per cent.

* Wasteful costs such as hiring equipment rather than maintenance of existing equipment.

Crafar's lawyer Dan Parker said the injunction was withdrawn, then dismissed because "at the moment there's not enough evidence of funding". If that improved then they are going to re-apply."

Crafar said he wanted to stop the sale to give himself time to redeem his debts.

The Crafars were ordered to pay the legal costs of the banks and receivers in relation to the injunction bid.

The farms were New Zealand's biggest private dairy operation when they went into receivership last October.

Bruce Stewart, lawyer for the receivers, said KordaMentha was now free to push forward with the sale process.

State owned farmer Landcorp put in a "realistic offer" with Wairakei Pastoral.

UBNZ has signed a conditional agreement to buy the portfolio of 16 farms from the receivers for $213.2 million plus stock.

That agreement is subject to Overseas Investment Office approval and has been structured so the receivers can accept a better or more favourable offer.

One Crafar supporter, who did not wish to be named, was in court to see proceedings.

"We want him to win," he said. "He's a good bugger, he is a battler. I would like to see him get through this, he is taking on some giants out there," he said, adding the receivership was a "mess".

Tenders for the properties closed on Wednesday and receivers said they have now had the chance to look over the bids, although a decision would be some time away.

- with NZPA