Management of Gunns plantations

[codeMunk3y]

Hi guys,

We purchased some land down here in Tassie a few months back and it contains roughly 100 acres of Gunns plantations. It was planted 5 years ago and is due to be harvested in another 10 years.


Given that it's all up in the air- does anyone have any advice on what to do with it. As far as I am aware, we're contractually obligated to leave it alone, however given that the harvest date is so far away, I'm under the impression that the liquidators will sell off the plots that are coming up for harvest in the next few years and will cut and run before ours comes to maturity.

We have issues, in that it's a fire hazard and that in 10 years we'll probably be left with trees that no one wants because they're only good for chips, or they haven't been maintained and they're full of weeds and other plants.

Does anyone know if there is a way for us to do any kind of maintenance in the mean time that will a) reduce the risk of fire, and b) allow us to have trees of even a little quality that might be worth something in the future?

We're also keen in finding out more about maintaining the rest of the land- does anyone know of any good native forestry management books or resources?

Thanks.

[bsrlee]

At this time I'd suggest contacting the Receivers and see what they have to say for themselves.

If you don't have a copy of the original contract, ask them for a copy so you can check your obligations if any regarding maintenance, clearing and such. If you are not obliged to look after the plantation, tell them that the block is not being maintained possibly leading to loss of value.

They may make an offer to you for you to buy out the trees or even just say they are of negligible value and they are all yours to do with as you please (firewood plantation?) - keep a copy of all correspondence

If you are worried about fire hazard, keep a cleared area around the plantation so any fire won't spread into the more useful parts of your property - maybe even have a word to the local fire service about bushfire hazards, if there is one plantation going to ruin in an area there are likely to be several and the local firies should know where they stand in relation to hazard reduction

In any case, don't panic.

[Evanism]

Contact the receivers.

You will not be unique with your query..

I find it hard to imagine why the receivers haven't communicated this to you. As the lessee on an asset, it is their job to use it to to maximise the return to a creditor.

If they just walk away, which I sort of doubt (rights will be sold to some other mongrel company), then you have a forrest to play with :)

[Evanism]

Well, 1 minute on google thoroughly answered this.

The info you need is here: Gunns Limited & Gunns Plantation Limited | PPB Advisory (http://www.ppbadvisory.com/creditor-information/v/297/gunns-limited-gunns-plantation-limited) and also at 3:15 here: More Managed Investment Scheme uncertainty - ABC News (Australian Broadcasting Corporation) (http://www.abc.net.au/news/2012-10-03/more-managed-investment-scheme-uncertainty/4293368)

Not trying to be overly critical, but if you "recently" purchased this land (post collapse) and your solicitor didn't lay it all out to you, I'd be speaking to a lawyer.

If they did advise you, then you must not have read the contracts. I would very strongly suggest you get on top of this. Reading through to info would suggest you are on the hook for quite a bit. If you drop the ball there could be severe financial ramifications.

Given your query and your financial interest in this, plus the ease the simplest of searches turned up some extremely relevant info very fast, perhaps you should speak to someone (like a solicitor) who can help you manage this. You need to get informed and fast.

E

[codeMunk3y]

I have looked online in a number of places for information about what's happening and it's all the same news: No one knows what's happening.

The only other news that I have received is that by the time they sort it all out- then it will be too late to do anything really worthwhile with the trees other than chip them because all the maintenance hasn't been kept up.

We purchased pre-collapse, but knew it was potentially likely to happen. We didn't purchase with a dependance on the income from those trees, so anything that we do get will be a bonus. We have also worded the transfer contract so that the person we purchased from will be required to cover financial costs if they arise.


I just don't believe that with 10 years left on the contract that anyone will pick up the lease. No one will want to pay yearly lease for the next 10 years for trees that aren't worth that much.

[rustynail]

What does it actually say in the contract you have signed? I wouldnt be talking to the receivers as they will tell you to keep your cotton picken fingers off. Get good legal advise and go from there.

[codeMunk3y]

Contracts says no touchy, which we have honoured, we haven't even gone into the plantation.

We will continue to clear around the plantation, to try to keep the fire risk down, and that's it.

[rustynail]

Ok, if thats what the contract says fair enough. So the duty of care is on Gunns receivers so hold them to it. They dont have the right to place you in harms way with summer coming on. More than likely they will condescendingly give you permission to go in and carry out the necessary work. Hit em with a quote if you need the income, but be careful, only if you have liability insurance etc. These guys dont take prisoners. Better they organise their own contractor or sign the plot back over to you. Be pushy, you might be able to score yourself a free plot of trees. Dont take any s*#t off the bathtubs, its your property that is at risk while they stuff about.

[Toymaker Len]

Why wouldn't the trees produce millable timber in the long run ?

[codeMunk3y]

Anecdotally we've been told that as maintenance hasn't been kept up, then they quality of timber will only be good enough to chip

[ian]

We purchased some land down here in Tassie a few months back and it contains roughly 100 acres of Gunns plantations. It was planted 5 years ago and is due to be harvested in another 10 years.

Given that it's all up in the air- does anyone have any advice on what to do with it. As far as I am aware, we're contractually obligated to leave it alone, however given that the harvest date is so far away, I'm under the impression that the liquidators will sell off the plots that are coming up for harvest in the next few years and will cut and run before ours comes to maturity.

We have issues, in that it's a fire hazard and that in 10 years we'll probably be left with trees that no one wants because they're only good for chips, or they haven't been maintained and they're full of weeds and other plants.

Does anyone know if there is a way for us to do any kind of maintenance in the mean time that will a) reduce the risk of fire, and b) allow us to have trees of even a little quality that might be worth something in the future?


I have looked online in a number of places for information about what's happening and it's all the same news: No one knows what's happening.

The only other news that I have received is that by the time they sort it all out- then it will be too late to do anything really worthwhile with the trees other than chip them because all the maintenance hasn't been kept up.

We purchased pre-collapse, but knew it was potentially likely to happen. We didn't purchase with a dependance on the income from those trees, so anything that we do get will be a bonus. We have also worded the transfer contract so that the person we purchased from will be required to cover financial costs if they arise.

I just don't believe that with 10 years left on the contract that anyone will pick up the lease. No one will want to pay yearly lease for the next 10 years for trees that aren't worth that much.


Contracts says no touchy, which we have honoured, we haven't even gone into the plantation.

We will continue to clear around the plantation, to try to keep the fire risk down, and that's it.Hi

I find it inconceivable that something like a 100 acre wood lot leased to Gunns would not be wrapped up in excruciating detail in a contract most probably attached as a covernant to the land title documents. I believe Macquarie Bank was associated with many of the Gunns timber schemes -- which should be "enough said"

I also find it inconceivable that the contract merely says "no touchy".
I would expect that you are under an obligation to protect the trees from any and all risks originating in or passing through your property. eg if your house burns down and the fire spreads to the wood lot, you the owner will be responsible for the tree owner's financial loss, likewise if a grass fire runs through your place and destroys the trees, it will be your neck. You might also be responsible when the blackberries in your gully spread to the trees, so even the weeds among the trees might be your problem.

I would also expect that regardless of how the transfer contract was worded, the liability is entirely yours


wood lot contracts are drafted by very smart, sneaky lawyers paid millions per year in salary and even more in annual bonuses (because they are very good at their jobs), which are designed to be signed by a property owner who may not have finished high school.

[rustynail]

I guess we will only know what the obligations are once we know the content of the contract.

[codeMunk3y]

Hi

I find it inconceivable that something like a 100 acre wood lot leased to Gunns would not be wrapped up in excruciating detail in a contract most probably attached as a covernant to the land title documents. I believe Macquarie Bank was associated with many of the Gunns timber schemes -- which should be "enough said"

I also find it inconceivable that the contract merely says "no touchy".
I would expect that you are under an obligation to protect the trees from any and all risks originating in or passing through your property. eg if your house burns down and the fire spreads to the wood lot, you the owner will be responsible for the tree owner's financial loss, likewise if a grass fire runs through your place and destroys the trees, it will be your neck. You might also be responsible when the blackberries in your gully spread to the trees, so even the weeds among the trees might be your problem.

I would also expect that regardless of how the transfer contract was worded, the liability is entirely yours


wood lot contracts are drafted by very smart, sneaky lawyers paid millions per year in salary and even more in annual bonuses (because they are very good at their jobs), which are designed to be signed by a property owner who may not have finished high school.

There is a covenant on the title, and there is a very wordy contract, we don't have any buildings on the land, and are very careful with any fires. The land is locked up so no one else has access and we will continue to clear around it till we know what's happening. Luckily there isn't any blackberries or gorse on the land.

[ian]

CodeMunk3y

You may wish to read this http://www.ppbadvisory.com/uploads/i297-Gunns-Fact-Sheet-Number-7.pdf and other information on the administrators/ receiver's web site. Gunns Limited & Gunns Plantation Limited | PPB Advisory (http://www.ppbadvisory.com/creditor-information/v/297/gunns-limited-gunns-plantation-limited)

Burried in there is information on actions the Gunns receivers have taken to date. I'm sure I saw something about land owners being issued with notices under the corporations act. Perhaps your notice went to the previous owner, perhaps you need to register the change in ownership with the receivers.


The bits of information I found I particularly interesting are:


the Administrators do not have the necessary funds to pay the rent accruing under the leases of land used in the MIS.

the rights of GPL Woodlot Scheme investors have been reserved in relation to the scheme trees

landlords may be held to account in relation to scheme trees.

the obligation to undertake fire maintenance works in respect of leased land is generally imposed on both the land owner and lessee.

[FenceFurniture]

Anecdotally we've been told that as maintenance hasn't been kept up, then they quality of timber will only be good enough to chipYou need to know a great deal more about the timber before making any call on this. Starting with what species they are might be the go.

Remember that big timber companies don't have (e.g.) Mulga plantations, but it sells for very good coin. In fact I would suggest that timber companies only have a limited range of species that they will consider, but that doesn't necessarily mean that they can't be used for other applications.

As far as not keeping up the maintenance: Mapleman gets fantastic timber out of paddock-grown trees (and they sure as hell don't get any maintenance - not from him anyway :D).

All I'm saying is get all the facts first because different markets have different views of different species.

[ian]

but does the OP actually own the trees, or are they owned by someone else and his responsibility is to weed and water them while they grow?

[FenceFurniture]

but does the OP actually own the trees, or are they owned by someone else and his responsibility is to weed and water them while they grow?Ah well, I'll leave that for better brains than mine. Still be good to know what they are though.

[Bushmiller]

Yes. Definitely more information required as in which of the two parties had responsibility and what exactly were they. Once that is established you can begin to work out what the obligations and repercussions might be under the receivership. Gunns did not have an enviable reputation while they were solvent and there is little hope that in insolvency they will have become a benevolent society.

Do whatever you can first to understand the situation based on your contract and then get independent, professional advice early on, but not in huge detail unless your pockets are deep or you don't mind paying for extravagant holidays for your legal consultant.

As to the species, it is probably irrelevant apart from the potential it has to yield a return, but much of that has diminished with Gunn's demise. It is, however, of great interest to Forum members as to what has been planted :) .

I hope everything turns out for the best, but as others have said, watch your step and be wary.

Regards
Paul

[codeMunk3y]

Thanks everyone that has posted here with information, I'll endeavour to get proper wording from the contract and some pictures :U

[ian]

Thanks everyone that has posted here with information, I'll endeavour to get proper wording from the contract and some pictures :Upictures would be good

also, get the full contract and read it

[MAI]

Do you know whether they were being grown for pulp or sawlogs? And what species? This should be in the contract.

A big expense in forestry is initial establishment. That has already been done on your block. There's a range of possible outcomes depending on what state the trees are in. If they're nitens or globulus they could possibly both be grown on for sawlog and maybe veneer for the better stems. Globulus could be harvested earlier for roundwood construction if a local market exists. Some farmers in Vic who have had leases ended on their globulus pulp plantations are now coppicing the trees and selling the rounds as plantation firewood! Some other farmers in this cohort are looking at biochar.

If the trees have been planted at high stocking rates they will need to be thinned if you decide to grow them on for sawlogs. And possibly some pruning might add some value. Private Forests Tasmania could possibly help with advice on management and markets Private Forests Tasmania (http://www.privateforests.tas.gov.au/)

Good luck with it. In Europe having a large woodlot is seen as a sign of wealth! Here we seem a bit more ambivalent about trees on farms

MAI

[codeMunk3y]

We've finally gotten some feedback in relation to the trees and have been given one of three options

We buy them and then arrange for the harvesting, selling etc.
The trees are harvested and there's some funding in the way money is split up
The lease just terminates


I think we'd like to go with option 2 and be done with it, let them take the trees and give us whatever money we're due. We never really bought the land expecting it to make us returns, so any money is good in our eyes. The only issue is, I think option 2 will only be on the cards for people who have mature trees and ours are supposed to have another 7-10 years to grow before they're expected to be harvested.

[ian]

We purchased some land down here in Tassie a few months back and it contains roughly 100 acres of Gunns plantations. It was planted 5 years ago and is due to be harvested in another 10 years.


We've finally gotten some feedback in relation to the trees and have been given one of three options

We buy them and then arrange for the harvesting, selling etc.
The trees are harvested and there's some funding in the way money is split up
The lease just terminates


I think we'd like to go with option 2 and be done with it, let them take the trees and give us whatever money we're due. We never really bought the land expecting it to make us returns, so any money is good in our eyes. The only issue is, I think option 2 will only be on the cards for people who have mature trees and ours are supposed to have another 7-10 years to grow before they're expected to be harvested.Based on your reported the time of planting "5 years ago" and "the 7-10 years to grow before harvest" suggests to me that you either have "wood chip" or "pulp feed stock" trees.
That is unless the 7-10 years to harvest refers to when the first thinning is due to occur

[codeMunk3y]

We have been told they are pulp trees with a total 15 year growth plan.

There are still too many unknowns, but we want to offload them to someone, we don't want to end up sitting on a plantation that we don't know what to do with or that isn't going to benefit us.

[Evanism]

Offer to buy them all at an absolutely ridiculous, knock down, obscenely horrible nose bleeding rate.

The administrators have to look at it.

Start at $1000 for the lot.

[codeMunk3y]

Why not $1 :U

I don't really want 29 acres of pulp wood because I don't want to look after the maintenance side of things. They're apparently not good for anything else because they start rotting from the inside before they get big enough to mill.

[codeMunk3y]

Some pics of the plantation:

http://i.imgur.com/OraUmNO.jpg

http://i.imgur.com/EeLGmur.jpg

http://i.imgur.com/E8xhJzt.jpg

http://i.imgur.com/Rmh6bFG.jpg

The trees are perhaps 4-5 metres high