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Southern investors face a long wait

Andrew Main From: The Australian November 28, 2009 12:00AM

THE 40,000 embattled "grower investors" in timber schemes managed by the defunct Great Southern group will now probably have to wait until January or even later to get a clear resolution of their dilemma of which of four options to go ahead with: three potential replacement scheme managers or a wind-up.
Victorian Supreme Court judge Jennifer Davies yesterday handed down orders that strengthened the legal standing of any vote to come at a meeting called by McGrath Nicol, receiver of the responsible entity (RE) structure devised by Great Southern that controlled the schemes but which is now insolvent.

The receiver had been concerned, as had potential replacement Tasmanian listed group Gunns, that a vote might later be found to be invalid. The judge reassured the receiver on that point, which will allow a planned meeting on December 23 to go ahead. The receiver would like to see Gunns appointed to fill the RE role but there are two other Perth-based groups, Pulpwood Plantations and a group called Black Tree, which have put forward alternative proposals, and the Pulpwood proposal already has a set meeting date of December 10 in Perth.

There have been strong representations made by a number of groups, including regulator ASIC, to have the three schemes and a possible wind-up vote all considered at the same meeting.

But the judge was not specifically asked to rule on combining the meetings and did not do so.

Pulpwood Plantations is headed by respected Perth businessman Gordon Martin and Phillip Butlin, a former Great Southern executive, is understood to have an involvement. Pulpwood Plantations has not been directly active in the RE replacement process run by the receiver.

Black Tree, which did hold talks with the receiver, is headed by Tony Jack, who founded Integrated Tree Cropping, subsequently acquired by the Futuris group.

There had been a number of reports speculating that McGrath Nicol had been trying to collar a group of votes that had belonged to the Great Southern companies, representing between 15 per cent and 30 per cent of the 10 different schemes, which it planned to vote in favour of its proposal to install Gunns as RE.

To change the RE, the constitution of the schemes has to be altered and that requires a vote in favour by 50 per cent or more of the grower investors in each scheme, voted on one at a time.

If no change is made, it becomes more likely that the schemes will be wound up.

A spokesman for McGrath Nicol said yesterday that the judge had ruled the shares could be voted but that they belonged to companies under the control of Ferrier Hodgson as they were in voluntary administration.