By Gareth Vaughan
Nearly two years on from pulling the plug on sister farming firms McVitty Properties and Patoka Dairies, the Bank of New Zealand (BNZ) continues to be owed about NZ$70 million.
The BNZ called in PwC's Maurice Noone and John Fisk as receivers for Patoka Dairies Ltd and McVitty Properties Ltd, farming groups in the Manawatu and Hawkes Bay, on March 16 and March 18, 2010, respectively.
Based on Noone and Fisk's most recent receiver's reports, the BNZ has recovered just NZ$2.5 million of the NZ$40.2 million it was owed at the date of receivership by Patoka Dairies and NZ$7.55 million of the NZ$43.2 million owed by McVitty Properties, leaving a combined NZ$73.35 million, excluding accruing interest, outstanding. However, since the receiver's reports were issued some of the McVitty Properties farms in the Manawatu have been sold meaning the total amount owed to the BNZ should have fallen.
At the time BNZ pulled the plug, Patoka owned and operated four dairy farms and two dairy support units in the Hawkes Bay with three of the dairy farms recent conversions. After delays and cost overruns with the conversions, Patoka wasn't able to reach production targets set before the conversions. 
This, on top of a reduced dairy payout in the 2008/09 season when Fonterra paid NZ$5.20 per kilogram of milksolids down NZ$2.46 from the 2007/08 season, meant the company was unable to service its debt. McVitty Properties, Patoka's major shareholder and a guarantor of its debt, was subsequently also tipped into receivership.
McVitty Properties owned and operated dairy farms, sheep and beef farms and dairy support blocks in the Manawatu and Hawkes Bay regions. It had also invested in several joint venture farming operations.
Both companies were controlled by Bob McVitty who was convicted in 2008 of obstructing a MAF inspector after an incident where McVitty shot a sick cow. Noone told interest.co.nz McVitty no longer has a role with either company.
PwC has continued operating the farms and completed the conversions. Noone said some of the group's farms, Manawatu dairy farms, were sold in November with two others sold about a year ago. Noone said remaining Manawatu properties will be sold in "coming months," but no decision has been made on when the Patoka farms will be put on the block.
Noone wouldn't comment on how much money the BNZ may ultimately get back from the twin receiverships.
The latest receiver's report says it's unlikely there'll be anything available for Patoka's unsecured creditors' whose claims total NZ$3.36 million, with NZ$442,000 claimed by trade creditors and NZ$2.94 million stemming from unsecured advances from McVitty Properties. McVitty Properties' unsecured creditor claims are put at NZ$333,000 based on confirmations received, although company records show they are "substantially" higher with Noone and Fisk suggesting unsecured creditors will be unlikely to get any money back.
The McVitty Properties receivership has been running in conjunction with the receivership of assets held by the R J McVitty Trust. The Trust's assets, such as livestock, motor vehicles, plant and equipment were sold at market value to McVitty Properties by BNZ.
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