LAWYERS behind a Timbercorp class action have begun the fight against a court decision that denies compensation payments to investors in the failed agribusiness investment company.
Macpherson+Kelley Lawyers has launched a class action in the Victorian Court of Appeal on behalf of Timbercorp investors.
M+K managing director Victoria, James Sturgess said the decision in the Timbercorp case handed down in September by the Hon. James Judd was "very disappointing" for the thousands of Timbercorp investors.
“The decision denied damages to investors in the Timbercorp schemes and disallowed investors relief from having to pay out loans arranged through Timbercorp to fund their investments,” Sturgess said.
"The grounds of appeal fundamentally rest on Timbercorp’s failure to disclose to investors information about such key risks as the company’s possible running out of cash needed to keep the projects alive for their intended long-term duration.
"The grounds of appeal essentially invite the Appeal Court to overturn Justice Judd's interpretation of key sections of the Corporations Act dealing with disclosure obligations placed on responsible entities of managed investment schemes and conclude that those obligations were not properly discharged by Timbercorp Securities Ltd," he said.
M+K has consulted with the more than 2,000 former Timbercorp investors who are members of the class action and there is strong support for the appeal.
“Many of our clients now face considerable ongoing loan obligations for worthless forestry and horticulture investments. In aggregate Timbercorp Finance Pty Ltd says it is owed approximately $448m under loans made to those investors in the projects who are members of the class action," Sturgess said.
“The appeal is not only important for these investors but this is an important area of law that potentially has implications for the hundreds of thousands of investors involved in Australia’s multi-billion dollar managed investment sector.”
M+K is separately involved in a series of 16 class actions for investors in all Great Southern managed investment schemes offered during 2005 to 2008, with the trial expected to begin next August. As part of these actions, Bendigo and Adelaide Bank is facing claims that its loans are void due to misleading or deceptive conduct on the part of Great Southern in marketing the investment and loan package.