'KordaMentha was appointed Voluntary Administrators to the Proserpine Co Operative Sugar Milling Association Limited on 6 November 2011. The Proserpine Sugar Mill was the last Co Operative Sugar Mill in Queensland with approximately 220 member growers supplying sugar cane to the Mill and an employee base of approximately 180 employees, excluding seasonal workers employed during the crushing of sugar cane. In the 2011 crushing season, the Mill crushed approximately 1.4 million tonnes of sugar cane.
The appointment followed the failure of two required special resolutions from the members of the Co Operative to approve the sale of the Mill in August and October 2011. Under the rules of the Co Operative Act 1997 the sale of a business representing greater that 5% of the Co Operative’s asset base required a special resolution of 75% of valid member votes to approve the sale. In each occasion approximately 70% of members voted in favour of the sale which was short of the required majority.
After the second failed vote in late October 2011, the Mill’s major financier withdrew ongoing support and the Board was unable to source satisfactory alternative funding to allow for the continued operation of the Mill. Based on these events an urgent Board meeting was held on Sunday 6 November 2011 where it was resolved that the Co Operative was insolvent. KordaMentha was appointed as Administrators of the Mill on the same day.
Upon appointment, KordaMentha continued to operate the Mill which was in a crucial maintenance stage in preparation for the next crushing season. After conducting a financial assessment of the Mill it was clear the business had insufficient working capital to continue operating and an urgent sale as a going concern was required.
The financial state of the Mill was dire and the KordaMentha team quickly recognised that the business would have effectively run out of funds to continue the trading operations by the end of the second week of the appointment. Whilst dealing with the ongoing critical trading, insurance and funding issues, urgent negotiations were also taking place with interested parties for the sale of the Mill’s assets. Two parties expressed interest in purchasing the Mills assets and were invited to present their best offers to purchase the Mill’s assets.