Hanover serves papers against Allied Farmers over $5 mln in dispute
Dec. 16 (BusinessDesk) – Hanover Finance Ltd., the failed lender owned by Eric Watson and Mark Hotchin, has served papers against Allied Farmers Ltd. over its refusal to pay $5 million as part of the companies’ debt-for-equity swap.
Chapman Tripp, which acts for Hanover, has served legal proceedings on Allied Farmers over its decision not to make the payment, which was part of the ill-fated deal that saw Allied take on Hanover’s loan book.
The deal issued billions of shares in the rural services company to the failed financier’s depositors.
Allied insists it was entitled to cancel the payment, claiming Hanover breached the terms of their agreement in some of the last transactions before the swap.
Yesterday, the Securities Commission froze some of Hotchin’s assets in a preventative move to preserve the interests of any Hanover investors who successfully make a claim against the lender.
Both the commission and the Serious Fraud Office are investigating Hanover. Shares in Allied rose 5% to 2.1 cents in trading today.