Victorian milk broking company National Dairy Products (NDP) was insolvent, with debts of more than $4.5million and only a handful of assets, according to administrators.
The administrators, Deloitte Touche Tohmatsu, declined to comment on claims up to 100 creditors – including farmers, transport companies and processors – would be seeking payment, from the company.
But administrator Glen Kanvesky said the company, run by Tony and Violetta Esposito, was clearly insolvent.
“In the absence of a credible deed of company arrangement proposal, liquidation will be the only option available to creditors,” Mr Kanevsky said.
“The company is clearly insolvent.”
The first meeting of creditors will be held next Monday, after it was placed in voluntary administration last week.
Former supplier Alex Roberston, Simpson, said it was unlikely farmers would get the money they were owed.
“There is about $100,000 left in the company, so there is not going to be a hell of a lot to go around,” Mr Robertson said.
Mr Robertson disputed Mr Esposito’s claims that he had put money into NDP.
“I’ve asked Deloitte to make sure they go through all the bank records, not just the accountants records,” he said. “We don’t believe he has put a ‘brass razoo’ into the company.”
The Australian Securities and Investments Commission (ASIC) is now investigating NDP and has been contacting suppliers.
Mr Robertson confirmed ASIC had contacted him.
“There is an investigation going on – he has no milk, and I don’t think we are ever going to see the money.”
An ASIC spokeswoman declined to confirm whether a complaint about NDP had been received, or whether it was investigating the company.
Administrators, Mr Kanevsky and Salvatore Algeri, of Deloitte Touche Tohmatsu, said it appeared NDP’s debts exceed $4.5 million.
“Books and records show an amount in excess of $4.5m, which includes approximately $1.1m owing to Scottish Pacific as the secured lender under an invoice discounting arrangement,” Mr Kanevsky said.
“We have also been advised by management that there are loan accounts between various related parties.
“However we have not yet made an assessment of any related party assets or liabilities. “
Mr Kanevsky said on current estimates, Scottish Pacific would be repaid in full.
“Beyond that, there is only a very small number of physical assets – two motor vehicles and some office equipment and furniture.”
The first meeting of creditors would involve the appointment of administrators.
“Creditors have an opportunity to establish a Committee of Creditors with whom the Administrators would consult/communicate,” a Deloitte spokesman said.
Suppliers have said they are owed up to $300,000 by NDP.
NDP farmers have been taken on by other processors, notably Murray Goulburn and Fonterra.
Another supplier, Chris Gleeson, Crossley, said the chances of getting payments were “pretty slim.” “It depends on how well Deloitte does its due diligence in going through the books,” he said.
The failure of NDP cast a shadow over the whole dairy industry, particularly payment times for products like milk. ”The dairy industry needs to look at how many days your are exposed, before you are paid,” he said. ”There is too much exposure, it’s just too long for the industry.”
And young Katamatite farmer Josh Norris, who milks 160 cows, said he only switched to NDP, from Murray Goulburn (MG), because the milk price was too low.
“I ran out of time at MG because I couldn’t afford to keep going – they were paying me $3.90kg/ms, so I was advised to ring around and find a new milk factory that would take me on,” he said.
Mr Norris said NDP was the only company prepared to accept his milk, and had promised payment, right up until the time NDP went into administration.
“Even when everyone left, he (Tony Esposito) said everything would be fine; he waited until the day we were to be paid and then put the company into administration,” Mr Norris said.
He has since been taken on by Tatura.
