Receivers hit back at 'irrational and uncooperative' Crafars; allege cattle rustling

Receivers Michael Stiassny and Brendon Gibson from Korda Mentha have rejected claims by Allan Crafar that they mistreated the family and mis-managed the dairy farms they once owned, instead alleging the Crafars were 'uncooperative and irrational'. Stiassny and Gibson said the Crafars helped remove 1,450 cows from Crafar farms in the dead of night without the receivers' permission, essentially engaging in the biggest individual act of cattle rustling in the history of New Zealand farming. The Crafars are reported to be refusing to leave their farms near Reporoa and have vowed to keep fighting the wishes of the receivers, who in turn have issued trespass notices and launched legal action to evict them. Here is the full statement below from Gibson and Stiassny.

Michael Stiassny and Brendon Gibson strongly refute the allegations of rough treatment of the Crafar families and the poor management of the farms postreceivership. The Receivers highlight the significant investment made to ensure the farms remain operational, compliant and ready to be sold. Michael Stiassny describes the receivership as one of the most intense he has encountered. “To be frank, the situation we encountered when we were appointed was of a magnitude unparalleled in the industry. The resource required to address the serious issues was more than anyone could have imagined. “We have overseen significant investment in management, infrastructure and systems to ensure the farms continued operating through the next season beginning in June and are in a good position to be sold as going concerns. ”In addition to the dire state of the farms upon receivership, the receivers have had to contend with irrational behaviour of the Crafars, including assisting with the removal of cows and refusal to leave the properties required for new management and staff. The following outlines the general issues encountered by the receivers: Stock condition and state of the farms at appointment There were serious operational issues on most of the farms when Receivers were appointed. “Our first concern was for the welfare of people, livestock and the environment,” said Mr Stiassny. “We immediately put together a team of experienced large scale dairy farmers to provide on-farm management advice. In addition we have required specific consultation with regard to the effluent and other resource consentobligations which were deficient on a number of farms.” MAF investigation A MAF investigation that was in progress at the time of receivers being appointed resulted in specific directions being issued with respect to the feeding and management of some of the animals.“The first fortnight was consumed with working with MAF to deal with their animal welfare concerns, which meant we were effectively under supervision,” said Mr Stiassny. “With so many stakeholders at risk including the industry, local and central government, staff and the service sector we had little room to move or in factcontrol performance through the seasonal production peak until around December.” A number of properties were found to have significant animal welfare issues at the time and action was taken to alleviate the immediate problems. There was a shortage of on-farm feed which was exacerbated due to the poor weatherconditions at the time. It was clear there was no feed buffer to mitigate adverse weather events and on appointment the receivers had no choice but to buy in hundreds of tonnes of feed. General comments made by MAF appointed consultants in the first two weeks of the receivership indicated that they considered a significant number of the cows were either emaciated or in an unacceptable condition. The condition of these animals was attributed to a combination of underfeeding, ill-treatment andmismanagement.The receivers worked with MAF to ensure remedial action was undertaken to stabilise the animals and the properties for the long term. MAF have subsequentlyundertaken re-inspections and under their monitoring system all farms have been given a “green light” with respect to cow condition, management and infrastructure. Sharemilking arrangements The receivers were advised that a number of the sharemilking arrangements in place at the date of receivership were poorly documented and not compliant with the Sharemilkers Order or the terms of those agreements when the sharemilkers entered the properties in previous seasons. The receivers are in the process of finalising new sharemilking contracts on the dairy units. Council prosecutions A number of prosecutions underway pre-receivership indicate how the business had been run with limited respect for the requirements of the four regional councils in which the farms operate. Years of poor maintenance resulted in breakdowns and heightened risk of environmental breaches. Receivers have spent significant funds to date, with further capital expenditure required in order to bring the farms into a compliant state, and ensure there are systems in place to reduce the risk of failure and further environmental prosecutions. The Crafar Family On top of the operational concerns, receivers have had to deal with the Crafar family who have acted to inhibit the receivers taking the necessary steps required toturn the farms into an acceptable state. “We initially offered members of the family remuneration, however we withdrew thisoffer when it became clear they were not only being uncooperative, but in fact assisted in the removal of approximately 1450 cows without our knowledge,” said Mr Stiassny. “Consequently we had no option but to issue trespass notices and dispense with their services.”It has also meant they have had to employ security guards to protect assets. This came at a substantial cost, in addition to the loss of milk income from the cows removed before their return. More recently, the unwillingness of the Crafars to vacate the properties has been under the spotlight. The properties are required in order to provide a reasonable standard of housing to the current and incoming staff managing the farms. Whilst under no legal obligation to do so, the Receivers made an unprecedented and generous offer to three Crafar families of six months' free rent in separate homes in Rotorua and have been in regular contact with family members since the offer was made. To date members of the Crafar family, including Allan Crafar, have rejected this offer and remain on the farms. As a result the receivers have initiated legal proceedings to have them removed. The Receivership Process The receivership has consumed a huge amount of resources due to the operational issues when appointed, and from legal issues resulting from specific claims over ownership and title to company assets. This has involved substantial legal costs. A number of legal proceedings are underway to deal with pre-receivership contracts which were never settled or have resulted in certain claims over assets.Production is down on previous years, however the loss of 1,450 cows for a month in the peak of the season, poor cow condition coming into the season, MAF supervision following appointment, the adverse climatic conditions throughout the region and the reduction in leased land under management are factors of note. “As mentioned, this has been an exhausting and difficult process and we know thatall stakeholders have been affected, including staff, contractors, the dairy industry,dairy farmers and the general public,” said Mr Stiassny. “We have overseen significant investment in management, infrastructure and systems to ensure the farms continued to operate through the next season and are now in a position to be sold as going concerns.”