Fincorp action to go ahead
A $29 million class action involving Sandhurst Trustees, the appointed trustees of failed investment company Fincorp Investments, will go ahead after being granted approval by the Federal Court of Australia on Friday.
The action will be negotiated by national law firm Slater & Gordon on behalf of 5,000 investors who lost money in the 2007 collapse.
Slater & Gordon litigation lawyer Odette McDonald said the money 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.
It is significant that unsecured noteholders are included in the class action settlement, because they did not receive any funds from the liquidation of Fincorp, she said.
“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,” she said.
Slater & Gordon stated it is pursuing compensation from Sandhurst Trustees, alleging Sandhurst breached its duties as trustee for investors under the Corporations Act. This would represent one of the first times these provisions of the legislation have been used to recover compensation from a trustee, the firm stated.
“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,” McDonald said.
According to Slater & Gordon the action 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.
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