Hastings based Progressive Meats has been dragged unwillingly into customer Binxi NZ’s internal management dispute with Binxi’s Chinese owners alleging its New Zealand management has been siphoning profits into their own pockets with Progressive’s knowledge.
As part of routine debt-collecting by Progressive, the High Court was told Binxi alleges some $23.3 million was lost through the dishonest activities of Binxi’s former senior management.
Binxi delivered stock to Progressive’s killing chain, paying a fee per carcass processed.
Details of Binxi’s internal ructions surfaced in the High Court when Progressive applied to put Binxi into liquidation for $208,700 unpaid processing fees. Binxi in turn claimed it was owed money by Progressive; at least $11.2 million in profits diverted.
Binxi has legal action currently underway against former senior managers Arron Hoyle and Gerard Brier alleging a company they controlled, Kereru Foods Ltd, was inserted into Binxi’s sale chain for the purpose of creaming off profits from onwards sale of processed product. They were stood down from Binxi in July 2023.
Binxi alleges Progressive was wise to use of Kereru Foods to divert Binxi profits. It claims Progressive is potentially liable to pay damages.
Progressive says it had no knowledge of the commercial arrangements between Binxi and Kereru Foods and that it is entirely speculative that Progressive is in any way liable.
The High Court was told of a July 2020 email exchange between Binxi’s Mr Brier and Progressive changing their mutual accounting procedures, diverting ownership of processed meat to Kereru Foods while leaving killing charges with Binxi.
Progressive says it had no reason to question the bona fides of this request. It had dealt with Mr Brier and Mr Hoyle as Binxi management contacts for the previous six years. The fact Binxi kept paying Progressive invoices for the subsequent three years meant there was no reason to question these new arrangements.
Associate judge Skelton ruled Progressive could continue its liquidation claim against Binxi for unpaid processing fees. Binxi was given 14 days to pay the $208,700 claimed, or face liquidation.
Judge Skelton ruled the Binxi could not resist payment of its current $208,700 debt on grounds of what was a speculative counter claim against Progressive contingent on the outcome of its current dispute with former Binxi management.
Binxi Foods NZ Ltd v. Progressive Meats Ltd – High Court (8.04.24)
24.085