Class action against Timbercorp Finance by Macpherson & Kelly.
Mark Korda as Timbercorp's liquidator recently stated at one of the growers meetings that he would press for recovery of outstanding amounts under loans made to growers. He said "Timbercorp Finance is obliged to collect the money".
Macpherson Kelley firmly believes good legal grounds exist as to why the liquidator should not be able to collect the money, at least not all of it.
The time has come for M K's clients to now persuade the Court that the interests of the growers are to prevail over the interests of Timbercorp's creditors (which include ANZ Bank as the creditor holding security over the majority of Timbercorp Finance loan book).
Also, for non-borrower clients of M K the time has come to seek damages and refunds which the insurers of Timbercorp and its directors would be called on to meet. They were required to carry professional indemnity insurance which covers claims of the type that M K clients have against the company and its directors.
The effort to obtain available remedies for clients in respect of money or financial commitments is in our view a worthwhile pursuit. It focuses on historical transactions between the failed companies and the people who invested in the projects they sold. Even if projects are going to survive through other operators the fact remains that remedies about the money can still be pursued and this can happen now.
Likewise, the fact investors might have chosen to terminate their involvement in any project does not stop people from having M K represent them in the proposed class action.
The most economical way for M K's clients to advance their own individual claims is within the framework of a class action. Every client's case can ultimately be resolved, and we are confident of a favorable resolution, through a class action. The class action is as much about the group's claim as it is about resolving each individual’s own claim within the single case.
It needs to formally commence by 25 September 2009, so as to tie-in with a number of cases in the Victorian Supreme Court already under way, where KordaMentha sued "defaulting borrowers". We have only 16 days to arrange for the required number of clients to fund their own cases within the framework of a single case - a class action.
The nine M K clients already sued would form part of that group and they, along with all other M K clients who retain us to act for them in the proposed class action, are going to have to meet the legal costs together.
M K clients can now sign up to move from the (accomplished) "first base" to the class action "second base". Under the proposed fixed fee tables cost structure we can commit to commencing the class action by 25 September 2009 for the benefit of each and every one of our clients so long as enough clients sign up before that date.
If we don’t have the numbers to support this contemplated class action we will simply refund the money people pay us under the fixed fee tables and everyone will be left to fight their own battles. In that situation the costs per investor would be much higher than if the battle was fought together under a class action.
The proposed class action is against the Responsible Entity for the projects, Timbercorp Securities Limited (in Liquidation), as well as Timbercorp Finance Pty Ltd (in Liquidation) and the directors of those companies personally. M K has no intention of joining any financial planner or accountant as a defendant to the Court action.
If the proposed class action goes ahead and if we achieve the anticipated successful outcome for our clients then our commitment would be to distribute back among our clients on a pro-rata basis 80% of any costs received from the defendants under any Court Order or negotiated outcome, being recovered costs relating to issues that were common across the entire group of investors (e.g. non-disclosure of key financial information Timbercorp was obliged to disclose to growers long before the company collapsed).
The balance of 20% of any costs successfully recovered from the defendants would by agreement (only on achieving a successful outcome) be able to be retained by M K as an aggregate case management fee for bringing the entire case together and handling all the funding and logistical administration which will have been of benefit to each and every one of our clients. More detail on this is in our formal retainer document, together with an alternative setting for the case management fee.
As a matter of urgency you are asked to consider our invitation to choose whether or not you would now like to retain M K as your lawyers to pursue your individual claims under the banner of the class action.
You will need to read the attached documents and if you want to get to "second base" you will need to sign and send back what is required. It is very important that the deadline of 25 September 2009 is met.
Please contact:
Katrina Slifka
Macpherson Kelley Lawyers
40-42 Scott Street Dandenong Vic 3175 | DX 17501 | Dandenong
Ph: (03) 9794 2620 | Fax: (03) 9794 2560
katrina.slifka@mk.com.au
Click here for Frequently Asked Questions about Meetings.
July 23rd TGG Press Release, click here.
The Timbercorp Growers Group (TGG) has been established to ensure that managed investment scheme investors affected by the failure of the Timbercorp group of companies end up in the best financial position attainable through coordinated advocacy and action.
Formed in June 2009, TGG represents the interests of around 18,400 members (growers) of the 36 managed investment schemes operated by Timbercorp Securities Ltd. The group is now under liquidator KordaMentha.
While TGG believes that each project should be independently assessed for potential viability before it is wound up or sold for no return, this position may not supported by the banks, which are secured creditors.
TGG has set up a Trust Fund to finance legal and expert costs on behalf of all growers. With only one shot possible, contributions to the Trust Fund are urgently required to give legal efforts the best possible chance of success.
The executive committee of TGG takes responsibility for the material on this website.
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Clarendon Lawyers have many anonymous donations in their trust account and in the controlled monies account. If you or one of you clients has made a donation and did not send an e-mail to Keata Lewis at Clarendons, please send an e-mail now [keata.lewis@clarendonlawyers.com.au] and supply the following details:
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Name of the donor
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Whether the donation was to the Trust Account or the controlled monies account
We have been advised by the Chairman of the Timbercorp 2006 Avocado meeting, Peter Holt, that Friday’s meeting was adjourned until further notice.