Administrators of failed grain merchant Alexander Inglis & Son are to apply next week for a court order allowing them to sell grain held by the company.
Tom MacLennan and Chad Griffin, partners with business advisory firm FRP, were appointed joint administrators of the £100m turnover company on 12 May.
The application comes as a result of issues surrounding the ownership of and entitlement to grain and other commodities held by Alexander Inglis & Son.
Determining entitlement to the stock will not be quick or straightforward, said the administrators, with competing claims having been received alleging ownership of the stock or a right in security over the stock.
In a letter to “creditors who may have a claim in relation to certain stock in the possession of the company”, the administrators set out the background to the application to the courts.
It states that the company holds significant stock (including malting barley, wheat, oilseed rape and oats) at five stores at Ormiston, St Boswells, Errol, Loanhead – all in Scotland – and at Swarland, in Northumberland.
“Following the administration, it has become clear that the quantity of stock at each of the company premises is significantly less than expected, and significantly less than the claims on the stock received by the joint administrators from third parties,” said the letter.
“In a number of instances, the contracts entered into by the company for sale, purchase, or storage required the company to store the relevant stock separately, or with notices identifying ownership of the relevant stock.
“It appears that the company did not do so, leading to significant issues in identification of ownership and reconciliation of the stock. As a result, it is not possible to identify any particular stock as relating to any particular contract.”
The administrators said that in order to obtain best value for the stock, it needed to be dealt with expediently. They did not consider it be practical or appropriate to wait until the claims have all been adjudicated upon and then for the stock to be distributed accordingly.
Their plan is to sell all of the stock, maintaining the sale proceeds in a secure and separate account, then in due course seek further authority to deal with the net sales proceeds once entitlement to the proceeds has been determined.