Live export deal fallout

A meeting between administrators Grant Thornton Australia (GTA) and creditors on Tuesday resolved to begin the selling of stock after the two-year-old export arm of West Australian Carpenter Beef went into receivership last month owing more than $20 million to creditors.

There are currently 6900 Friesian and Angus heifers held in quarantine at GG Feedlot, Wimmera, which will target the export market and 4100 head on agistment mainly in Western Victoria with a small portion in NSW, Tasmania and Western Australia that will seek domestic sale.

Livestock agents DLS, Charles Stewart, Alex Scott and Wellington Livestock, who are owed an accumulated $4 million from the collapsed deal, were among the 30 creditors that attended the meeting held in Melbourne.

GTA managing partner Matthew Donnelly said DLS was chosen as the facilitating agency because it was "heavily invested" in the export deal.

"It came down to a narrow race after a selection process and the committee of creditors was happy to appoint it because the agency is capable of dealing with the export market," Mr Donnelly said.

"I'm going to DLS and will say I've got these cattle and what is the best way to maximise the sales?"

A committee of creditors was established during the meeting, which will assist GTA in the administration.

More than 2000 of the quarantined heifers will be unfit for export, according to Mr Donnelly, due to feeding mismanagement causing acidosis. There has also been deaths in the consignment.

Last week Department of Agriculture vets attended the GG Feedlot and agistment properties to assess all of the stock, which Mr Donnelly said were in "satisfactory condition".

"In those circumstances (of acidosis infected stock) they will be broken out of the feedlot but we think there are 3000-3500 suitable for export and the best thing we can do is keep them inside the quarantine and sell them to an exporter," he said.

"They are still suitable for export to China which is the best market.

"I'll be working with (DLS) as an urgent matter to see if we can put together an export order to deal with those cattle."

Administrators will begin adjudicating debt claims this week after a delayed process determining ownership of stock due to del credere (on trust) contracts which Mr Donnelly said had been "complex and not straightforward".

"Inevitably there will be some claims that we acknowledge and accept in which case the cattle can be returned to or dealt with by the agent, and also regrettably there will be some cases where legal form says that title of the cattle has passed to the company in which case there will be some very disappointed agents," he said.

"An agent will say 'I've dealt with the cattle and haven't been paid for, therefore they are my cattle and I will come and pick them up' but unfortunately the legal form may not say that … we are working through how that all falls out at the moment."

He said, at times the meeting was tense with frustration and concern from independent agents impacted by the botched export order.

"There are individuals who are running mum and dad businesses that are owed hundreds of thousands of dollars and are concerned about what the outcome will be for them because there are a lot of unknowns at this stage," he said.