Allied Farmers last year acquired the Hanover and United loan books in a swap of debt for equity. However, recently it has blamed Hanover Finance for infringing their contract.

Allied Farmers are seeking a legal recourse against Hanover Finance, which has been an unsuccessful venture of Mark Hotchin and Eric Watson.

Allied stated that Hanover has been unsuccessful in managing its assets in the usual and ordinary course. The Company also accused Hanover for not consulting it about the future deals and not clearing out finance assets without getting prior consent.

Hanover is also accused of not putting into effect the conditions of any contract assumed by Allied.

According to Allied these claims are of more than $5 million. This means that allied will not make a payment of $5 million under the terms of the agreement. Also, it will not follow any commitments in the coming times.

Rob Alloway, the Managing Director of Allied shared that the claims have been made in relation to many contracts, where they were not able to ascertain any adequate profitable basis or benefit to Hanover. It also comprises the discharge of personal guarantee and the marketing of assets at a price that Allied considers is less than the market value.