Veg growers owed millions as Bunny Bites the dust

dmA vegetable processing company owned by the chairman of the industry's peak body, Ausveg, may have been trading while insolvent for two years before it went into administration, owing farmers millions.

The Queensland-based processor, Bunny Bites Foods, went into voluntary administration last month owing nearly $10 million.

A report by the administrator shows that more than $5 million is still owed to creditors following the sale of the business and key assets to recently-created company Veg Pro 4.

The administrator, Robson Cotter Insolvency Group, has advised creditors that they may be able to make a claim against the company's directors for insolvent trading.

"The company has been clearly reliant on leverage and borrowing to maintain its operations since at least 2011," a report to creditors says.

"It is evident that the company is insolvent and has traded and incurred additional debts whilst insolvent."

ASIC records show that the company was owned by its two directors, Peter Brent and Ausveg chairman, John Brent.

Documents obtained by the ABC show at least $3.9 million is owed to more than 100 unsecured creditors. Robson Cotter estimates these growers will receive between 0.4 and 8 cents for every dollar they are owed by the company.

A vegetable processing company owned by John Brent, chair of peak grower group AUSVEG,
has been identified in an administrator's report as trading insolvent for up to two years.

A spokesperson for the administrator told the ABC that some creditors with a personal guarantee from the directors may be able to make claims directly to John and Peter Brent. It isn't clear how many growers have secured personal guarantees or how much this will affect the amount available to other creditors.

Documents obtained by the ABC show the largest creditor is a vegetable producer from Tasmania who claims to be owed almost $1 million. The company refused to comment for this story.

Several growers have told the ABC they are worried they won't get their money, but have been afraid to voice their concerns due to fears it might affect them being paid.

A key concern expressed by growers is the potential conflict of interest which may prevent Ausveg speaking on behalf of growers about the issue.

"It's a bit rich for John Brent to be talking about the need for sustainability in the industry for Ausveg when he owes millions to farmers who probably won't get paid," said one grower.

"How he can claim to speak on behalf of growers now, I don't know," said another.

But another creditor told the ABC he doesn't believe Mr Brent holding a position at Ausveg is an issue.

"It's just another food processor that's gone belly up. What's new in that?" he asked.

The ABC has attempted to contact John Brent several times but he is yet to comment publicly on the matter.

John Brent is also a director of Growcom, the peak body for Queensland's horticulture industry and the mayor of the Scenic Rim shire in southern Queensland.

Growcom and Ausveg refused a request for an interview with the ABC. Both groups denied there is a conflict of interest with Mr Brent remaining on their boards while his former company goes through administration.

The company which has bought the business, Veg Pro 4, has described itself in an advertisement for employees as "a fast growing vegetable processing facility located in Boonah in the Heart of the Scenic Rim".

ASIC records show Veg Pro 4 is owned by an accounting firm based in Brisbane.

A meeting is due to be held on Monday where creditors will decide whether to pursue liquidation or settle on a Deed of Company Arrangement.

Under the deed, the administrator estimates that the total payout to growers will be around $200,000 including $100,000 from the directors themselves.

Source: ABC News, 11 July 2013