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Riding a wave of debt

PHOTO/STOCK.ADOBE.COM

‘All creditors will be paid’
TWO YEARS on: Taratahi Agricultural Training Centre liquidators look to the High Court to turn the tide on debt recovery operation
Part of the Taratahi campus. PHOTO/FILE

It’s been two years since Wairarapa’s long-standing education provider Taratahi was placed in liquidation as it struggled to keep its head above the water.

Now, the liquidators are hopeful the process will be wrapped up by the end of the next farming season if they can find a buyer for the campus land.

According to the liquidators’ fifth report, creditor claims of more than $15 million remained outstanding.

To date, there were 247 unsecured creditor claims.

While the liquidators had sold off some farm assets, no suitable purchaser for the campus land had yet been found.

The liquidators were seeking advice from the High Court on the status and saleability of the land, which had to be maintained for educational purposes.

Taratahi was placed in interim liquidation on December 19, 2018, and on February 5, 2019, it was placed in full liquidation by a High Court order.

Financial problems surfaced at Taratahi in 2014 when it was found to not be providing the teaching it was funded to deliver from 2009 to 2014.

As a result, Taratahi was left with debts of $7.5m due to under-delivery.

This was in addition to the significant private sector debt it held.

All preferential entitlements of the training centre employees have now been paid out in full, however the Inland Revenue Department is still owed pre-liquidation payroll taxes.

While they attempted to pay the creditors, liquidators David Ruscoe and Malcolm Moore of independent accounting and consulting firm Grant Thornton had continued to work with the government to find a new landowner for the training centre.

In their third report, the liquidators had stated that “the funds available for distribution to the unsecured creditors are all dependent on the ability of the liquidators to realise value at the Wairarapa campus and home dairy farm.”

The liquidators would continue to run the three Taratahi farms for the 2021/22 season, as they generated commercial value that would benefit creditors.

In the past six months, the liquidators had also sold off assets including property and equipment valued at $14,030, and capital livestock of $200,558.

The liquidators had claimed fees of $1.5 million for the period from February 5, 2019 to February 5, 2021.

“Ideally, we’re out by the end of the next farming season, and it’s all wrapped up and everyone will be paid,” Ruscoe said.

“All creditors will be paid, but we have to make sure we are actually able to sell that piece of land as well.”

By law, the training centre lands must always be used for educational purposes.

Wairarapa MP Kieran McAnulty had originally wanted Taratahi to become one of the country’s first Centres of Vocational Excellence [CoVEs]. However, in September 2020, Education Minister Chris Hipkins announced that a Food and Fibre CoVE would be the country’s first Primary Sector CoVE.

“We acknowledge that the decision not to support Taratahi in terms of direct funding from the government was controversial at the time, but over time, people have come to see that it was the right decision,” McAnulty said.

He said that before the government could support it directly, Taratahi – a private training institution – would have to come “into the polytech fray”.

An agreement was made for Ucol to lease the Taratahi Home Campus as part of the government’s covid-19 recovery programme. Ucol delivers short courses on the Taratahi campus that prepare workers for jobs in primary industries.

Their lease had been extended until June 30, with liquidators indicating that it would be extended further.

McAnulty said that Taratahi would eventually be integrated into the Reform of Vocational Education, with the aim to establish an agricultural Centre of Excellence in Wairarapa.

 

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