Margaret River dairy farmer Myles Mottershead is owed $360,000.CHALLENGE Australia Dairy was formally liquidated at a creditor’s meeting last Thursday.
The South West dairy processor is going into liquidation to pay off more than $20 million in debts and owes about $7m to its joint venture company Challenge Dairy Co-operative (CDC) which has about 47 farmers on its books.
CDC chairman Imre Menschelyi said there was no mention of how much money was available to farmers or the timing of payments.
He said land and plant would have to be disposed of first before its members could receive any funds.
CDC was put into a standstill arrangement in December but will receive and distribute funds to its members as liquidation money becomes available.
“I would suggest it is unlikely before six months,” he said.
Mr Menschelyi said a monitoring committee of creditors had been formed which included one CDC board member.
He said once the redistribution of funds had been completed, CDC would remain a shelf co-operative company so it could be rekindled in future if necessary.
Margaret River dairy farmer Myles Mottershead, who is owed $360,000, said he did not expect to get much money before the end of the year.
“I’m hopeful that we’ll get above 80 cents in the dollar but I’m not holding my breath at this stage,” he said.
“We view anything as a bonus because the way it was going there would have been nothing much left.
“The way it’s looking, by June we’ll know pretty much what we’re going to get.”
CDC director and Sabina River dairy farmer Neville Haddon is owed $500,000 and said he hoped the receivers would complete things as soon as possible because it was costing the farmers too much money to have them there.
“It’s pretty heart-wrenching to think that you’ve built up a company for so long and it just gets taken out of your hands at the end of the day,” he said.
“I haven’t been tied up in any sort of liquidation before in my life and I don’t ever want to do it again either.”
Meanwhile a CDC supplier now contracted to National Foods has confirmed that they have guaranteed to pay the full contract price for all the milk supplied until June 30, as long as the supply is similar to previous supply patterns.
The original contract volume for Challenge suppliers taken on by National Foods was for about 75 per cent of their historical supply at a price similar to that paid to their base farmer suppliers.
The remaining 25pc was also collected by National Foods at a lower price to on-sell to others.
Steve Scott, Boyanup, said National Foods had now committed to pay the contract price for all the milk they could supply until June 30.
He assumed all ex-Challenge suppliers contracted to National Foods had been made the same offer.
“But once we get past June, we fall back to our contract volume,” Mr Scott said.
WAFarmers dairy section president Peter Evans said the increase was good news as Challenge farmers had missed out on money in the last few months.
This story Administrator ready to work first appeared on Nanjing Night Net.