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Court approves Westpoint class action settlement
The major ASIC-backed class action by Westpoint investors today saw success as the Federal Court approved a $13.5 million settlement
The New Lawyer
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THE major ASIC-backed class action by Westpoint investors today saw success as the Federal Court approved a $13.5 million settlement. The Australian Securities and Investments Commission initiated the class action on behalf of investors against Melbourne-based trustee company State Trustees Ltd. It relates to investments made in Mezzanine Notes issued by a company in the failed Westpoint group. This is the fourth settlement of ASIC’s Westpoint compensation proceedings approved by the Federal Court. A statement by ASIC today said the settlement allows approximately 525 eligible investors to submit a proof of claim to participate in the distribution of the $13.5 million. It is estimated that Group Members should ultimately recover approximately 71 cents for every dollar they invested in the Mezzanine Notes. The investors in Westpoint-related financial products had an outstanding total investment of $388m when the group collapsed. Since November 2007, ASIC has commences 19 civil actions seeking to recover investors’ funds. This included a claim against KPMG, the former auditors of the Westpoint Group, claims against seven financial planners and a claim against State Trustees Limited. ASIC then obtained court orders for a global mediation of the actions commenced by ASIC for compensation arising from the failure of the Westpoint group. The current settlement is now binding upon Group Members. Under the terms of the settlement, State Trustees has until 15 March 2010 to pay the settlement sum to ASIC. The settlement was reached without any admission of liability by State Trustees. This settlement results from the global mediation initiated by ASIC to resolve the litigation commenced by it seeking compensation on behalf of Westpoint investors, ASIC said today. ASIC will distribute the settlement sum, along with interest earned, to those Group Members who submit a valid proof of claim. ASIC expects to be able to distribute the settlement sum in the last week in August.
