FORESTRY company Gunns is considering a takeover of timber projects run by its collapsed rival Timbercorp, amid warnings from Timbercorp's administrator that it may move to wind up more of the company's managed investment schemes.
Gunns representatives are believed to have flown to Melbourne yesterday to discuss the Timbercorp forestry schemes. One meeting was with Chris Garnaut, a financial adviser and Timbercorp investor who opposes any winding up of Timbercorp's projects.
Mr Garnaut said he had met the Gunns company secretary, Wayne Chapman, about Gunns taking over as responsible entity for the schemes and had raised the matter with Timbercorp's administrators, KordaMentha.
Gunns declined to comment.
Timbercorp Securities, the responsible entity for the managed investment schemes, is "hopelessly insolvent", KordaMentha has warned.
Timbercorp's olive and almond managed investment schemes need more than $300 million to complete next year's harvest.
The "responsible entity" runs the project and protects investors' interests. Winding up the schemes would leave Timbercorp's investors, also known as growers, with little claim on their investments.
In what is believed to be a first, KordaMentha has asked the Supreme Court for advice on whether it should apply to wind up the olive and almond schemes.
In a directions hearing yesterday, Leon Zwier, for KordaMentha, told Justice Ross Robson the question of whether the administrators should wind up the schemes was "controversial", and the administrators "should be protected by a direction from the court".
"They … are facing a conundrum that by winding up the schemes the growers may receive very little return," Mr Zwier said. "[But] the responsible entity is hopelessly insolvent."
He said the administrators were "considering going beyond the almonds and olives" to make further applications.
Justice Robson noted the "tension" between KordaMentha's role in providing returns for Timbercorp creditors and its obligation to the growers.
Barrister Michael Galvin, who said he represented about half of the almond and olive scheme investors, said KordaMentha faced a conflict of interest. He told the court one party, Huntley Management, had expressed interest in taking over some schemes, but "there's an issue about whether the administrators will co-operate".
The Sydney Morning Herald understands some mango and avocado scheme investors want to appoint Huntley Management as responsible entity.
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