National firm prepares for major class action 13 August 2010 | by The New Lawyer . NATIONAL law firm Macpherson + Kelley Lawyers has filed amended statements of claim in the Victorian Supreme Court, detailing allegations in the investor class action relating to the 2005 and 2006 Great Southern pulpwood plantation projects.
Investors across all other Great Southern managed investment schemes sold between 2005 and 2009 are pursuing claims for damages and declarations that loans from interconnected lenders are void or unenforceable, the firm said.
Macpherson + Kelley said it expects to file further similarly themed class actions over the next few weeks.
Between 2005 and 2009 Great Southern offered finance to investors and sold interests in its managed investment schemes for olives, almonds, wine grapes, vineyards, beef cattle, pulpwood plantations, renewable fibre and high value timber.
The average amount invested in Great Southern schemes through the prior four years was $50,447 per investor, calculated from the 89 per cent of investors who had invested less than $100,000, Macpherson + Kelley said in a statement.
That figure appeared in a submission made in July 2009 by the Australian Securities and Investments Commission to the Parliamentary Joint Committee Inquiry into agribusiness managed investment schemes
According to the firm, based on information about total funds raised in the various Great Southern projects and applying the average amount invested according to ASIC, there were at least 12,000 investors who invested between 2005 and 2009 in Great Southern's pulpwood plantation projects, 3200 in Great Southern olive projects, 380 in an almond project, 2700 in beef cattle, 1700 in wine grapes, 570 in vineyards, 2000 in renewable fibre and 2500 in high value timber.
The firm said that, in total, more than 25,000 investors poured money into this set of projects between 2005 and 2009. Not everyone opted for the readily available finance arranged by Great Southern. Of those investors who did, almost one in every three through that period ended up with a loan held by Bendigo and Adelaide Bank.
The bank's ASX release on 4 August 2009 stated the bank was exposed to 8,200 borrowers in Great Southern managed investment schemes.
Bendigo and Adelaide Bank is a central defendant in each of the class actions being brought by M+K on behalf of the Great Southern investors. Bendigo and Adelaide Bank in its presentation of full year results on 9 August 2010 noted a provisioning of $25.4 million in doubtful debts against loans to Great Southern to investors. It also showed that loans in arrears by 90 days or more at 30 June 2010 stood at $181.8 million, a huge jump from $15.5 million on the prior year. The 4 August 2009 ASX announcement indicated the bank's exposure was $550 million.
The banks proposed recovery action against individual borrowers is likely to meet a brick wall in the form of the series of investor class actions for all Great Southern projects sold between 2005 and 2009.
The law firm is acting on behalf of more than 2,000 clients who invested in various Great Southern projects and expects more to seek legal representation in the class actions. Its clients also include non-borrowers, whose claims sound in damages awards.
GTP Price at posting:
12.0¢ Sentiment: None Disclosure: Not Held
