Vege growing business owes more than $1m
A North Otago organic vegetable growing business, recently approached to appear on Country Calendar, has gone into voluntary liquidation owing more than $1 million, while a subsidiary company owes more than $300,000.
Organic Solutions, which traded as Oamaru Organics, is 53.45% owned by James Porteous — who is also the sole director — and Australian-based Lanson International Holdings Pty Ltd (46.55%).
Touted as the largest organic market garden in the South Island, it sold vegetables both at a roadside stall at Totara and through the Otago Farmers Market.
In a statement, Mr Porteous said the farm had ''long struggled with chronic overstaffing'', which significantly increased its financial burden and led to an accumulation of debt with the IRD.
He said he stepped in to directly manage farm operations in August, reducing staff numbers from nine to one and introducing mechanisation.
He said the farm became compliant with all ongoing tax obligations and began rapidly repaying historic tax arrears. Per-hectare revenue increased 39% and he proposed a ''realistic'' repayment plan, which was declined by the IRD.
The company would continue to operate and supply customers to the best of its ability throughout the farm sale process, he said.
Incorporated in 2014, it originally owned Thai restaurants around the South Island and bought the 23ha farm — one of its main suppliers — for $1.7m in 2019 to maintain supply.
The deal was later found to have breached the Overseas Investment Act because Lanson International Holdings — whose majority shareholder was Mr Porteous' friend Marc Lanson — owned more than 46%.
The rules stated Australians could not have more than a 25% share of any purchase of New Zealand land bigger than 5ha without gaining consent first. Organic Solutions was fined $20,000 and retrospective consent had to be sought.
In his first report, liquidator Brenton Hunt, of Insolvency Matters, said the majority of the restaurants were closed due to the outcome of the Covid-19 restrictions.
According to Mr Porteous, the business had struggled to be economic for some time. Inland Revenue payments had fallen behind and the IRD had begun recovery action. The last annual accounts completed for the company were in March 2022.
Plant and equipment and motor vehicles were to be collected and sold and there was finance owing on vehicles, Mr Hunt said. The land and buildings were also to be listed and sold (first mortgage owing).
Under preferential creditors, staff holiday pay was estimated at $10,000 and GST and PAYE were estimated at $900,000.
Unsecured creditors were estimated to be owed $1m and the total estimated shortfall to all creditors was estimated at $1,279,500.
An associated company, Southern Organics, which is wholly owned by Organic Solutions, of which Mr Porteous was also sole director, was placed in voluntary liquidation the same day.
That company, which was incorporated in November 2020 and ceased trading in November last year, produced organic soup products, and bought vegetables from the shareholding company.
According to Mr Porteous, the soup products originally sold well but sales were not enough to make it economic and it was very seasonal.
At the end of winter last year, the lease of a kitchen in Christchurch was surrendered and trading stopped.
Under preferential creditors, staff holiday pay was estimated at $20,000, while Inland Revenue GST and PAYE was estimated at $40,000. Unsecured creditors were estimated to be owed $300,000.
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