Timbercorp, Great Southern investors plan legal action TOP News
Investors in the managed investment schemes (MIS) sold by Timbercorp Ltd and Great Southern Ltd plan to take legal action against the administrators of the failed companies.
Litigation lawyer Rob Willemsen, from the law firm Macpherson & Kelly, said hundreds of investors had approached the firm for legal support over their investments in the two failed businesses.
Agribusiness company Great Southern was forced into receivership this week after its banking syndicate refused the company's calls for more support. Great Southern has raised $1.8 billion over the last five years and manages 43,000 investors.
Timbercorp appointed administrators on April 23, blaming declining global asset values, tightening credit, the economic downturn and drought for its collapse. Administrators KordaMentha said the agribusiness has invested more than $2 billion in agribusiness projects on behalf of 18,500 investors since 1992.
Timbercorp's forestry and horticulture operations were immediately suspend while funding operations are determined.
Mr Willemsen said the firm would put the case that growers involved with the Timbercorp project were not told of doubts in its ability to survive.
"Growers in the Timbercorp project were not told in 2008 of serious doubts about Timbercorp’s ability to survive," Mr Willemsen said in a statement.
"Timbercorp sent out its invoices for management fees pretending it was business as usual ... most investors paid up, often taking out loans with Timbercorp Finance to meet the bills.
“To find the facts which point to Timbercorp’s shaky financial position at the time you need to examine the 2008 annual report, which was published after investors had already paid more money to Timbercorp.”
Mr Willemsen said he had written to administrators of Great Southern, Ferrier Hodgson.
“Soon Ferrier Hodgson, as administrators of Great Southern, will also need to respond to our letters calling for investors’ rights to be fully recognised in respect of management fees paid and loans obtained to finance the Great Southern projects,” Mr Willemsen said.
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