Farmers have been left waiting with many owed money or with a ’considerable amount’ of grain in storage
Grain in storage at Wellgrain may be ‘significantly less’ than it should be, according to David Perry, partner at Tees Law.
Farmers have been left waiting following the company entering administration on March 2, with many owed money or with unsold grain in storage.
But Mr Perry said there was ‘an indication’ there was less grain than the claims being made against it.
Wellgrain declined to comment.
“We are currently seeking to ascertain the position with regards to the stored grain,” he said.
“Any farmer in this position needs to contact the administrators as quickly as possible and we would recommend that anyone in this position obtains legal representation.”
Administrators will prepare a report within 8 weeks of their appointment which will be sent to all known creditors with details on the administration and a proof of debt form.
There are over 100 creditors but Farmers Guardian understands there may be a lot more.
Mr Perry said part of the monies collected in would be set aside for unsecured creditors. However, this is likely to only be a small amount.
If a farmer owes money to Wellgrain it will need to be paid to the administrator but can be offset against any money owed by the company.
Cambridgeshire farmer and chairman of NFU Ely and Soham branch Luke Palmer said he had been left without payment and had spoken to others with ‘considerable amounts’ in stores.
“I do not think we are going to get any money. Sadly, we can do absolutely nothing. We are just having to sit and wait.”
Mr Palmer said he had previously had communication from Wellgrain allaying farmers’ fears.
“A lot of farmers feel cheated. They have put a lot of trust in the company.”
Mr Palmer advised other farmers to be honest with any suppliers they owed money if it had caused cash flow issues.
He also encouraged those affected to contact NFU Callfirst on 0370 845 8458.
For farmers with contracts, Mr Perry said: “The contracts I have seen to date can be determined in the event of insolvency.
“Formal notice of termination will, however, need to be sent to the administrator.”