Happy Cow Milk Com­pany placed in liq­ui­da­tion

Northern Outlook - - FRONT PAGE - OLIVER LEWIS

A com­pany lauded for its eth­i­cal and en­vi­ron­men­tally-friendly dairy­ing ap­proach has gone into liq­ui­da­tion owing a ‘‘sub­stan­tial’’ amount, but its founder is ‘‘99 per cent’’ cer­tain it will rise again.

Milk­ing on the Moove Ltd, which traded as Happy Cow Milk Com­pany, was placed into liq­ui­da­tion by a spe­cial res­o­lu­tion of share­hold­ers on May 14.

Founder Glen Herud, who is in the process of try­ing to re­fine and res­ur­rect his busi­ness model, said he was ‘‘gutted’’ and had told cred­i­tors he would per­son­ally re­pay them.

Herud started Ohoka, North Canterbury-based Happy Cow to pro­vide an al­ter­na­tive model to in­ten­sive dairy­ing.

Calves were kept with their mothers for up to 15 weeks and a mo­bile milker re­duced the ef­flu­ent bur­den by milk­ing cows in­pad­dock.

The first liq­uida­tor’s re­port showed, as of May 14, the com­pany could be left with an es­ti­mated short­fall of $575,057 once pref­er­en­tial cred­i­tors and cred­i­tors with spe­cific se­cu­ri­ties had been paid us­ing pro­ceeds from the sale of the com­pany’s as­sets, if they met their es­ti­mated re­al­i­sa­tion.

How­ever, the ma­jor­ity of this was classed as bank and credit card debt and money owed to share­hold­ers, com­prised al­most ex­clu­sively of Herud and his fam­ily.

The en­trepeneur said he had sold a piece of land that would be used to pay the bank, which would leave, he claimed, about $100,000 to pay other cred­i­tors.

Share­hold­ers would be the last to re­ceive any­thing.

Liq­uida­tor Robin Gar­den­broek said he could not com­ment on the $100,000 fig­ure, in­stead say­ing ‘‘we’re still quan­ti­fy­ing what the ex­act po­si­tion is, but there’s likely go­ing to be a sub­stan­tial short­fall’’.

He said other cred­i­tors had come for­ward since the first re­port was pub­lished.

Herud said he took ‘‘full re­spon­si­bil­ity’’ for the sit­u­a­tion.

‘‘It’s my fault this has hap­pened. I’m dis­ap­pointed that it’s gone to liq­ui­da­tion. It’s not what’s best for the cred­i­tors.’’

He said he had asked cred­i­tors to wait un­til he had raised enough cap­i­tal to form a new com­pany and res­ur­rect the busi­ness, at which point he had planned to buy back his orig­i­nal com­pany’s as­sets for the cost of the out­stand­ing debts.

How­ever, he said one cred­i­tor had threat­ened to ap­ply to the court to place Milk­ing on the Moove into liq­ui­da­tion – ef­fec­tively forc­ing the com­pany to un­der­take the process vol­un­tar­ily.

It had ‘‘thrown a span­ner in the works’’, Herud said, be­cause ‘‘all the as­sets are go­ing to be sold off and dis­trib­uted all around and we’re go­ing to have to re­build ev­ery­thing’’.

The busi­ness and its milk had been pop­u­lar with cafes and con­sumers, but its costs were un­sus­tain­able, lead­ing Herud to pull the pin on the project in a Facebook post last month.

‘‘I set out to prove that you can do dairy dif­fer­ently in NZ. But in re­al­ity you ac­tu­ally can’t or you can’t with­out some se­ri­ous money be­hind you,’’ he wrote at the time.

But the en­su­ing sup­port – a re­ported 6000 peo­ple signed up to the com­pany’s mail­ing list within 48 hours of him post­ing – con­vinced Herud to give it an­other go and seek fund­ing for a new and im­proved busi­ness model.

It is an idea he re­mains com­mit­ted to.

‘‘No-one else is go­ing to set up an eth­i­cal dairy farm. No-one else is re­ally as com­mit­ted to get­ting rid of plas­tic out of the milk in­dus­try.

‘‘We are still in the process of get­ting a deal to­gether to re­launch the com­pany on a na­tional scale … there’s a 99 per cent chance it’s go­ing to hap­pen.’’

Herud said he was talk­ing to su­per­mar­kets, pri­vate in­vestors and dairy com­pa­nies. He was also con­sid­er­ing a crowd­fund­ing scheme and had sur­veyed the com­pany’s more than 10,000 mail­ing list sub­scribers to gauge in­ter­est.

He ex­pected to be able to put out a plan to sup­port­ers late by early next week.

‘‘We’re still 100 per cent com­mit­ted. We’ve gone too far to stop now. If I don’t make a deal work then I’m ba­si­cally look­ing at bankruptcy. So, yeah, we’re go­ing to make it work.’’

An ad­mit­ted fail­ing of the pre­vi­ous busi­ness was Herud’s in­abil­ity to con­vince farm­ers to farm to his model, re­sult­ing in a short­fall in the cow num­bers needed to grow and sus­tain the busi­ness.

How­ever, Herud said a ‘‘cou­ple’’ farm­ers were now in­ter­ested. This meant ‘‘we won’t be the farmer any­more. We’ll let some­one else do the farm­ing and we will con­cen­trate on the distribution and mar­ket­ing’’.

‘‘We’ve learnt what not to do now.’’

JOSEPH JOHN­SON/STUFF

Happy Cow Milk Com­pany founder Glen Herud is ‘‘gutted’’.

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