Timbercorp Finance has begun court proceedings to recover around $15 million from investor growers who have defaulted on their loans from the company.
Mills Oakley Lawyers, who were engaged by KordaMentha to recover the loan book of Timbercorp Finance, lodged writs in the Supreme Court of Victoria on Friday.
According to Mills Oakley partner Joanne McCauley, the writs were lodged against 20 individuals who owed a total of approximately $15 million, plus interest and legal costs.
The amounts range from $219,000 to $2.49 million.
"Grower investors who borrowed from Timbercorp Finance have the same obligations to make loan repayments as they would if they had borrowed directly from a bank or other financial institution, irrespective of the performance of the underlying investment," KordaMentha partner and Timbercorp Finance liquidator Craig Shepard said.
Chairman of the Timbercorp Grower Group Chris Garnaut said KordaMentha was trying to bully people into paying money into assets that are in liquidation and called its actions "morally bankrupt".
"They are using intimidating behaviour and in fact the growers will be seeking relief against their loans if KordaMentha continue winding up the projects," Garnaut said.
Many of Timbercorp's investor growers obtained finance through Timbercorp Finance to fund their investments in the managed investment schemes.
Timbercorp companies were placed in voluntary administration in April and went into liquidation last week.
The balance of the Timbercorp Finance loan book when the group went into administration was $477.8 million and included approximately 14,000 loans.
McCauley said further writs were being prepared on other borrowers who were in default.
