Liquidators seek court quiz over Gunns debt

December 29, 2015 12:00am

 
 

THE liquidators of timber firm Gunns Limited want to quiz the company’s auditors over their role in the 2012 collapse involving $3 billion of liabilities.

PPB Advisory has summonsed Leigh Franklin and David Lumley of KPMG’s Hobart office to a public examination under the Corporations Act in the Supreme Court of Victoria early next year.

A hearing on December 15 was adjourned with the consent of both parties.

Gunns collapsed in September 2012 owing secured creditors $635 million, employees $10 million, unsecured creditors $134 million and $2.2 million in intercompany loans.

Associate Justice Simon Gardiner has ordered that Mr Franklin and Mr Lumley produce the books and financial records in their possession, custody or control relating to the examinable affairs of Gunns.

A Supreme Court of Victoria file reveals PPB Advisory liquidator Daniel Bryant wants to examine KPMG about its review of Gunns’ 2008 financial statements, the audit of Auspine to June 2009 and all financial models relating to the audits of Gunns group’s financial statements between June 30, 2009, and June 30, 2011.

Liquidators have asked for documents about the $2.5 billion Bell Bay pulp mill, land valuations, biological assets and receivables in relation to the managed investment schemes.

 

The 2011 documents sought include the Bell Bay pulp mill project financial model dated June 2011, pulp mill cost summary dated May 31 and the pulp mill capitalised cost summary.

A public examination is an investigative process used by liquidators to search for assets, inquire into potential claims, discover any offences and provide some sense of resolution to creditors.

 

Examinations are conducted under oath and anyone not attending without reasonable cause can be arrested and imprisoned.

Liquidators believe Gunns may have been insolvent as early as March 2012.

A report to creditors in 2013 said that a liquidator would investigate whether $1.4 billion of writedowns in assets values between 2010 and 2012 were sufficient.

“A liquidator will continue to investigate these matters and whether any Australian Auditing Standards may have been breached,” the report said.

In the Gunns 2011 annual report KPMG pointed out that the recoverability of $213 million of pulp mill expenditure was uncertain and there was uncertainty about the group’s financing arrangements.

Gunns Ltd shareholders settle actions against directors, officers including John Gay, Greg L'Estrange

Updated Fri at 3:37pmFri 18 Dec 2015, 3:37pm

http://www.abc.net.au/news/2015-12-18/gunns-shareholders-settle-action-against-some-former-directors/7040772

 

A shareholder class action against some former directors and officers of timber company Gunns Limited has been settled, subject to Federal Court approval.

The defendants include former chairman John Gay, former managing director Greg L'Estrange, and former secretary Wayne Chapman.

IMF Bentham funded the class action, which began in April 2011 after about 300 shareholders claimed disclosure obligations were breached in 2011.

The firm told the stock exchange that if the court approved the settlement, it expected to receive about $4.9 million in revenue, and a profit before tax of about $2.9 million.

It said the revenue was a proportion of the total settlement amount, and that both were conditional on Federal Court approval.

IMF Bentham told the stock exchange that the settlement was confidential.

Greg L'Estrange, John Gay, the firm representing the shareholders Maurice Blackburn, and IMF Bentham have all declined to comment.

It is not known if the defendants are personally liable to pay any money to the shareholders under the settlement.

The Federal Court will consider the settlement for approval 21 March next year.

 

Gunns went into voluntary administration in 2012, owing investors $780 million.