‘It’s The Law’ – Lempriere grain trader shock

Last Friday grain trader Lempriere Grain was placed into voluntary administration. This is alarming news for many Wimmera farmers who have had contracts to sell grain with Lempriere Grain.

Lempriere Grain has a major office in Ballarat and has been selling grain on behalf of Wimmera farmers since approximately 2003. The news of its voluntary administration has come as a shock to many.

One Rupanyup farmer, who wishes to remain anonymous, said:

“We’ve been delivering grain to Lempriere Grain for a good five years. Because they always paid well, we had no hesitation in dealing with them again last year”.

“I became very concerned when my grain broker called me last Thursday to tell me that Lempriere Grain were likely to be placed into voluntary administration”.

“They’re around a month overdue on a payment of almost $100,000”.

“I didn’t put all my grain through Lempriere, and it wasn’t as much as other years, but it is still a great deal of money.”

“We work all year to grow crops and then we don’t get paid.”

“We’ve got bills to pay; we’ve got loads of super coming for this year’s crop, that needs to be paid for”.

Horsham solicitor Patrick Smith said Lempiere Grain going into administration is very worrying for Wimmera farmers who have outstanding contracts with them.

“The voluntary administration of Lempriere Grain will conclude in one of three ways. There is a slight possibility that the company is returned to the directors’ control. However, this is unlikely. It is more likely that either a deed of company arrangement is approved by creditors setting out how the company will pay all or part of its debts or the company is wound up and a liquidator is appointed.

Regrettably, grain buyer insolvencies have hurt Wimmera growers many times before. In addition to growers not being paid for grain supplied, there are also stories about farmers being forced, by liquidators during previous grain buyer insolvencies, to repay money they had received for their grain.

Patrick Smith confirmed that there is a possibility that a liquidator could seek to recover payments already made to growers. “A liquidator appointed to Lempriere Grain may attempt to recover monies under the Unfair Preference provisions of the Corporations Act if Lempriere Grain has been trading whilst insolvent. However, there are a number of ways farmers can avoid a Court ordered recovery (or “claw-back”) of a payment. Growers should not comply with a request by the liquidator to repay a payment immediately. Instead, they should speak to solicitor about their options to resist the request”, he said.

Whilst growers with contracts with Lempiere Grain will likely suffer the most from the buyer’s move into voluntary administration, the move will likely have a flow on effect to other businesses and individuals across the Wimmera.

This article is intended to be used as a guide only. It is not, and is not intended to be, advice on any specific matter. Neither Patrick nor O’Brien Lawyers accept responsibility for any acts or omissions resulting from reliance upon the content of this article. Before acting on the basis of any material in this article, we recommend that you consult your lawyer.