find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Senior Government Lawyer
Category: Other | Location: Canberra ACT 2600
· FINANCE LEGAL AND GOVERNANCE GROUP | CANBERRA, ACT · EXECUTIVE LEVEL 1 (ONGOING)
View details
Court approves $29m Fincorp class action

Court approves $29m Fincorp class action

The Federal Court of Australia has today approved a $29 million class action settlement, negotiated by national law firm Slater & Gordon.

THE Federal Court of Australia has today approved a $29 million class action settlement, negotiated by national law firm Slater & Gordon. 


The firm is acting on behalf of more than 5,000 investors who lost money when Fincorp Investments Limited collapsed in 2007.

 

Slater & Gordon pursued compensation for investors from Sandhurst Trustees Limited, the appointed trustees of Fincorp, alleging Sandhurst had breached its duties as trustee for investors under the Corporations Act. The case represents one of the first times that these provisions of the legislation have been used to recover compensation from a trustee.

 

Slater & Gordon litigation lawyer Odette McDonald said the settlement was significant to the many ‘mum and dad and retiree investors’ who lost their savings in Fincorp.

 

She said the money that investors would receive under the settlement was in addition to funds already recovered by secured investors through the liquidation process and, for unsecured investors, represented the first time that they have recovered any money since the collapse of Fincorp.

 

“We are proud to have delivered a result that will see much-needed funds going back into the pockets of thousands of mum and dad and retiree investors,” McDonald said.

 

“Many small investors, from across Australia, invested in Fincorp because they mistakenly thought that it was as safe as investing in a bank.

 

“Clever marketing tactics and high profile endorsements were used to rope-in investors.

 

“The collapse of Fincorp in 2007 came as a horrific shock to the many, mainly older investors who thought they had invested in a low-risk company.”

 

The class action settlement covers investors who had purchased secured and/or unsecured notes issued by Fincorp on or after 7 December 2004 and held those notes as at 23 March 2007, or who purchased secured and/or unsecured notes prior to 7 December 2004 and rolled the investment over after that date.

 

McDonald said it was significant that unsecured noteholders were included in the class action settlement as these individuals did not receive any funds from the liquidation of Fincorp.

 

“Today’s result means that people who thought they had no chance of recovering any part of their investment, will receive a return of some of their lost capital.”

 

McDonald said the use of the provisions under the Corporations Act was a legal milestone.

 

“These laws mean that when a company like Sandhurst acts as trustee for a company that raises money from the public, and when the fund raising company involved folds, there might still be an avenue for justice for investors,” she said. 

 

Slater & Gordon, head of commercial and project litigation, Ken Fowlie, said the result again demonstrated the importance of Australia’s class action system.

 

“Class actions are by far the most affordable, effective and transparent way of achieving justice when big business fails its customers,” Fowlie said.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Court approves $29m Fincorp class action
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Scales of Justice, Victorian County Court, retiring judges
Aug 21 2017
Replacements named for retired Vic judges
Two new judicial officers have been appointed in the Victorian County Court, following the retire...
Applauds
Aug 21 2017
LCA applauds proposed Modern Slavery Act
The Law Council of Australia has welcomed new recommendations for the development of a Modern Slaver...
Mentoring
Aug 21 2017
Top-tier offers targeted mentoring for Indigenous law students
Students at Macquarie University will be the first to benefit from a new Indigenous mentoring progra...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...