Hanover withdraws summary judgement over Allied Farmers fee

Hanover withdraws summary judgement over Allied Farmers fee

By Paul McBeth

May 23 (BusinessDesk) – Hanover Finance has withdrawn its application for summary judgement against Allied Farmers Ltd. over $5 million owed for the failed-debt-for-equity swap at the end of 2009.

Hanover Group Holdings and HF Residual Obligations Ltd. have withdrawn their application for a summary judgement against Allied Farmers that the rural services company missed payment of the fee at the end of June last year. The claim will now proceed as a normal civil action, which Allied Farmers intends to defend.

A summary judgement bypasses the normal trial process, leaving a judge to decide the merits without the same rigour.

The relationship between the companies has soured since December 2009, when Allied Farmers took on the Hanover and United Finance loans books in a debt-for-equity swap in a bid to transform itself into a major lender. Through most of last year, Allied Farmers’ position worsened as the value of the Hanover assets was written down, with both companies accusing the other of breaching the terms of the agreement.

The stoush reached a crescendo at the end of the year when Hanover served papers on Allied seeking $5 million plus interest after the rural services company refused to pay the final instalment of the transaction.

Shares in Allied Farmers are languishing at 1 cent apiece, having halved in price this year.

Earlier this month, Hanover principal Mark Hotchin was granted access to some of his belongings after the High Court froze his assets in December on an application from the Securities Commission.

(BusinessDesk)

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