Willmott Forests

11 March 2021

The collapse of the Willmott Forests Group in 2010 had immediate, severe and wide-reaching impact.  From shortly after the collapse of the Willmott Forests Group in late 2010, Mackay Chapman’s directors were immersed in the myriad of complex issues and disputes it threw up, to guide their clients through.  

Dan and Michael’s work was marked by their unrivalled subject matter expertise and understanding of the group and its activities, and of the drivers of the key parties, their resilience and strategic approach to solving problems for clients. Over the course of 10 years, Dan and Michael acted for a range of stakeholders in the scheme, from investors and borrowers facing financial devastation through to acting for an action group, the Willmott Growers Group, and the scheme Responsible Entity and licensee, Primary Securities, in the protracted, complex and high impact dispute and reconstruction of the Willmott Forests 1995-1999 Project.

Where every other Willmott scheme collapsed, the 1995-1999 Project turned out to be one of the most successful MIS reconstructions in Australia.

Today Dan and Michael continue to act for Primary Securities in relation to the 1995-1999 Project.


  • Clients: investors, borrowers, accountants, financial advisors, investor representative groups, and responsible entities/fund managers
  • Location: Australia wide
  • Situation: Willmott Forests Group collapses in late 2010 threatening 44 MIS and hundreds of millions in investor value.  Many investors are heavily leveraged and risk losing not only their investment but having related loans called in and pursued
  • Outcome: MIS rescued and restructured, investment yielding returns, investor borrowers’ avoid recovery action.
  • Key elements of success: deep subject matter expertise; strategy; commitment; determination; pragmatism; creative thinking

The Long Game – 1995-1999 Project

The collapse of the Willmott Forests Group plunged its forestry schemes into disarray and distress.  The schemes were at risk of collapse and total investment loss.

The Willmott Growers Group Inc was formed to protect and advance the interests of investors in certain of the schemes which Willmott Forests operated.  The key WGG scheme was the Willmott Forests 1995-1999 Project, a 25 year radiata pine plantation.  $35 million had been invested in the scheme and investors had borrowed most of that to do so, an asset now controlled by WFL’s receivers.  And the 1995-1999 Project operated on unencumbered land, the major asset for unsecured creditors of the group and from which the liquidators would take their fees.

The receivers and liquidators started down the same path as they had for the other schemes, seeking to collapse and sell it.

From the outset, the receivers and liquidators treated the 1995-1999 Project as a lost cause and turned their sights to winding it up and selling it as a distressed asset, with only cursory attempts to find ways to resuscitate the scheme and find a new capable Responsible Entity to lead the way.

The WGG proposed replacing WFL with a new, solvent fund manager Primary Securities Limited (Primary). The Receivers thought otherwise and Supreme Court litigation ensued with the meeting of the scheme prevented from proceeding.  A deal was struck with the Receivers after months of negotiation, paving the way for the replacement of WFL by Primary in December 2011.  

With the Receivers out of the way, the dispute between Primary and the Liquidators began in earnest.  Recognising the Liquidators and the untested ‘disclaimer’ power under the Corporations Act as the major threat to the Project, the WGG embarked on litigation through the Victorian Courts and to the High Court, as a first line defence against disclaimer of the Project leases.  All the while, Primary was turning the Project around, with improving market conditions suggesting that the Project may soon become viable again.

Under sustained attack from the Liquidators, further Supreme Court litigation ensued, and a further appeal to the Victorian Court of Appeal.  All the while, critical time elapsed as the trees grew and regenerated, and Primary commenced forestry operations and cashflow.

Ultimately, in December 2015, the Liquidators moved to disclaim the Project leases.  On Christmas Eve Primary counterpunched, commencing action in the Supreme Court of Victoria to set aside the disclaimers.  The action grew in scope to include claims of fraud on the power against the Liquidators and other claims.  The approach was underpinned by strategy, with a number of crucial procedural and interlocutory steps in the proceeding being nudged in favour of Growers.  

Primary pulled apart the liquidators’ case piece by piece, demonstrating the viability of the Project and that winding up the scheme for little to no value would cause prejudice “grossly out of proportion to the prejudice that setting aside disclaimer would cause to WFL’s creditors”. This was supported by extensive expert evidence marshalled by Dan and Michael to show the competing substantive value of the Project versus the minimal effect of allowing the scheme to continue on WFL’s creditors.

Notwithstanding this, the liquidators fought all the way to trial. However, on the first day of trial, the matter resolved.  The deal involved the Project, now harvesting, viable and some producing distributions, acquiring the land on which it operated for the Liquidators.

Dan and Michael had guided a group of resilient Growers and Primary through over 6 years of high-impact litigation in a complex insolvency to rescue the scheme.

Along the way, we went to the High Court in a case that significantly changed the landscape for property and insolvency law in Australia.  

Where every other Willmott scheme collapsed or was wound up by the liquidators, the 1995-1999 Project not only survived but flourished, the meta-dispute settled on terms that saw the Project take ownership not just of the trees in dispute, but also the land on which they grew.  

The key elements of success: deep subject matter expertise; strategy; forward planning and risk analysis; resilience; trust and belief.

Opportunistic Plays

In 2011 a class action was commenced in relation to the Willmott 2007 to 2010 MIS.  The class action was seeking to set aside loans advanced to investors in the schemes on the basis that the investors had been misled or that the PDS under which they invested was defective.

With our deep understanding of the Willmott schemes and class actions, we identified a number of risks with the class actions.  We were approached by a number of investor borrowers and accountants whom we advised on the class action, its prospects and the key procedures.

We told them to stay away. The outcome of the class action, which gave no appreciable benefit to Growers and exposed them to claims that locked-out certain key defences with respect to their investment loans, vindicated that advice.

We also identified an opportunity.  Variable interest rates were falling in an environment in which banks were freely refinancing debt (alongside rising property prices).  Many of the investment loans in relation to these schemes were fixed at significantly higher rates, or under a refinance scenario a lower variable rate could be obtained.  With the class action on foot, there was an opportunity to approach the lender and make commercial resolutions of loans at a discount and utilising an overall lower cost of finance.

Using our industry knowledge and understanding of investment finance, loan book management and the parties involved, we brokered a number of one-off resolutions of loans with fees waived and/or discounts applied while the class action slowly progressed (ultimately wholly unsuccessfully).

Key elements of success: creative thinking; subject matter expertise; industry and party knowledge; strategy; commerciality.

Post reconstruction high impact disputes

On 17 December 2019, just a week before Christmas, Primary was suddenly in dispute with a key commercial counterparty over an $18M contract.  With limited time and background on the specific contract, and with Primary at increasing risk if the dispute was not resolved, Michael clicked into gear.  Getting across the contract, the context, the issues and, critically, the facts, he constructed a sound legal position and advocated it aggressively on behalf of Primary.

As the disaster of the Christmas and New Year bushfires in North East Vic and Southern NSW raged, Primary was in a position of strength with its counterparty, able to leverage off the uncertainty of the fires to resolve the dispute on the terms outlined by Michael.

The key elements of success: cut-through; control of the facts; analysis; decisiveness.