Clarendon Lawyers

On 23 April 2009 the companies in the Timbercorp Group appointed KordaMentha administrators as voluntary administrators of the companies including Timbercorp Securities Limited (TSL) which is the responsible entity of Timbercorp’s Managed Investments Schemes (Schemes).

At the first Creditors Meeting a committee of eight persons was formed by TSL and KordaMentha to represent the interests of growers (Growers Committee).

At a meeting of the Growers Committee, the Committee resolved to instruct Clarendon Lawyers to assist it in seeking to be joined as a party to the proceedings in relation to the wind up of the Olive and Almond Schemes. Clarendon Lawyers has also been assisting the Growers Committee in relation to its options and how to protect the interest of the Growers. This has included liaising with ASIC, preparing correspondence to the Ministers and negotiating with other parties including potential responsible entities for these Schemes.

On 29 June 2009, at the Second Creditors meeting, Mark Korda and Leanne Chesser of KordaMentha, were appointed as joint and several Liquidators of TSL by a resolution of creditors. The Liquidators now control the functions and operations of TSL.

On 4 June 2009 TSL and the then Administrators commenced proceedings in the Supreme Court of Victoria seeking orders to wind up the 2001 to 2004 and 2006 to 2008 Olive Schemes and the 2001 to 2007 Almond Schemes.

Clarendon Lawyers represented TGG in opposing the wind up application and represented a member of each scheme (sponsored by the TGG) in making applications for the appointment of a Temporary Responsible Entity.

The TGG refuted Korda Mentha’s position in court and argued that the Olive and Almond Projects may be viable under an appropriate recapitalisation or restructure proposal. TGG’s case for TGG was strengthened by survey results from the Australian Securities Investments Commission (ASIC).The survey canvassed Growers in the Almond and Olive Projects to determine what their preferred future for the Projects was. An overwhelming majority of 78% of investors wanted an independent Responsible Entity (RE) installed, whilst only 7% considered a “wind up” as desirable. Notwithstanding this, ASIC opposed TGG’s application for a temporary RE.

On 20 July 2009, TGG reached an agreement with the Administrators to stop the immediate wind up of the Almond and Olive Projects and agreed that meetings will be held to provide the Growers with an opportunity to vote on the future of the Almond and Olive Schemes. His honour Justice Robson made orders that meetings of each of the Schemes be held at short notice and adjourned the Administrator’s and the Growers applications. Details of what happened at the meetings are below.

On 18 August 2009, following the Almond meetings, the (now) liquidators recommenced their application to wind up the Almond schemes. This was opposed by the Growers and his honour gave directions that the liquidator was justified in causing TSL to amend the Scheme constitutions to enable it to surrender the sub-leases held by the growers.

On 21 August 2009, following the Olive meetings, the liquidators sought the Grower’s consent for similar orders to apply to the Olive Schemes. The Growers did not consent and the liquidator withdrew its application in court for such orders and decided to make the Constitutional changes in any case. On the same day, the growers sought to recommence its application for temporary REs for the Olive Schemes and a hearing date is set for 14 September 2009.

At the Almond Meetings an average of 92% of those who attended the meeting (excluding Timbercorp’s votes) voted for the continuation of the Schemes. Resolutions were also passed to amend the Scheme constitutions to facilitate the restructure of the Almond Schemes. The votes to replace TSL as RE was deferred in advance because, as expected with the very short notice of the meetings, insufficient votes were cast to pass these resolutions. Presentations were made at the meetings by Mark Korda, Chris Garnaut (for TGG), Stephen Lynch (Almond expert) and Sam Bailleu (of Align Funds Management Ltd) in relation to the proposed recapitalisation of the schemes.

At the Olive Meetings an average of 96% of those who attended the meeting (excluding Timbercorp’s votes) voted for the continuation of the Schemes. Resolutions were also passed to amend the Scheme constitutions to facilitate the restructure of the Olive Schemes. The votes to replace TSL as RE was deferred in advance because, as expected with the very short notice of the meetings, insufficient votes were cast to pass these resolutions. Presentations were made at the meetings by Mark Korda, Kerree Bezencon (for TGG), Stephen Lynch (Olive expert) and by potential replacement REs Primary Securities, Boundary Bend Limited and Great Land Olives.

Clarendon has reviewed scheme documents, advised the TGG and assisted them in liaising and negotiating with relevant parties in relation to the Olive and Almond Schemes. Clarendon has been preparing documentation for the court hearings, appearing at hearings and briefing counsel engaged to act for the growers. We have also operated a controlled monies account within our Trust account for the operation of the Fighting Fund.

TGG requested us to establish a trust account as a Fighting Fund for legal and other expenses incurred in fighting the wind up application, installing a new RE and performing independent viability assessments.

TGG is still seeking funds to underwrite its actions on behalf of growers. Details of how advisers and growers can assist are set out on the Timbercorp Growers Group website.

TGG will remain the client for purpose of the controlled monies account. By making a contribution you are agreeing to contribute to TGG's costs which will relate to legal costs and disbursements such as expert reports in relation to the legal proceedings to wind up the Almond and Olive schemes, related advice and any subsequent proceedings. The account details are as follows:

Please e-mail a confirmation to Keata.lewis@clarendonlawyers.com.au as follows: [Name of contributor] has made a contribution to the Clarendon Lawyers atf AAGRI Growers “New Future” Group (Committee) CMA of $[Insert amount] on [Insert date].

We also suggest that you e-mail TGG member Kerree Bezencon kerree@siger.com.au confirming your contribution and indicating whether you consent to your name being listed on the Timbercorp Growers Group website. For more detail about the need and purpose of the Fighting Fund, please read the letter [pdf] and attachments [pdf].

On 28 July 2009 KordaMentha sent to Growers in the forestry schemes a letter regarding lease default and disclaimer notices from landlords.

Clarendon Lawyers is investigating the possibility of commencing a class action on behalf of the Growers to attempt to preserve the Growers’ interests in the land.

If you are a member of these schemes, please go to the KordaMentha website and using your Grower ID check whether any of your woodlots are located on land owned by this landlord. To do this you will need to:

1.Click on “Yes” and that you declare and acknowledge the confidential warning to access information about the Timbercorp Scheme.

3.Click on your Grower ID link and locate your number on the list that is displayed – please note there may be several lines for your number.

4.Click on any notices that may be shown and identify whether they are from Plantation Land Limited – these were served by their lawyers Maddocks.

Can you please let us know whether you do own any such woodlots. We will then ascertain the number of people affected and whether a class action is practical in the near future. We have recently received upwards of 300 enquiries.

If you wish for us to do the search for you, we will require your Grower ID. We reiterate that we are not funded for the work undertaken in this matter to date. Accordingly, we would greatly appreciate receiving some initial funding (of $200) from each grower to help with these costs. Please send your contribution to our trust account below, which has been specifically established to help fund this investigation into the lease default notices which have been issued:

Please also e-mail a confirmation to tcorpsublessees@clarendonlawyers.com.au as follows: “[Name of contributor] has authorised and made a contribution to the Clarendon Lawyers ATF Timbercorp Securities Ltd Sub-lessees CMA of $[Insert amount] on [Insert date].”

If you are unable to confirm your contribution by email, please fax to 03 8681 4485 or post to Clarendon Lawyers, Level 17, Rialto North Tower, 525 Collins Street, Melbourne, Victoria 3000.

Please note that if you do not confirm your contribution, we will be unable to use the funds. By making a contribution, you authorise Clarendon Lawyers to apply your contribution towards payment of costs and disbursements (including counsel fees) in relation to this matter.

If you have any queries or questions concerning your proposed contribution, please feel free to contact Keata Lewis, Financial Controller, details are:

Most growers have the right to lodge caveats to protect their interests in their lots. In some schemes the caveats may survive even if the scheme is wound up. This may assist growers in achieving a payment for their interests if the scheme is wound up. If you would like us to investigate whether you are entitled to lodge a caveat and to prepare and lodge a caveat on your behalf, please email info@clarendonlawyers.com.au or call Katie Desmond on (03)8681-4429.

We are receiving a number of requests from growers for advice on their own personal circumstances and options. We are able to assist individual growers, but the fighting fund is not available to cover their legal expenses. Growers who wish to obtain individual advice will need to separately retain us. We are happy to give an estimate of fees before being retained.

On 28 August 2009 the Liquidators gave notice to disclaim the registered lease No J590660 and associated water licences (in the 2006 Avocado Scheme), between Jasper Farms Holdings Pty Ltd and TSL pursuant to section 568A(1)(a) of the Corporations Act (2001).

We note that a person claiming an interest in the disclaimed lease may apply to the Court pursuant to section 568B(1) to apply for the disclaimer to be set aside. At this stage, Clarendon Lawyers has not received any instructions to take action in relation to this matter.