Lawyer points to action against planners
Investors burned by the collapse of Timbercorp might have the option of recovering losses from the financial planners or accountants who advised them into the product, according to a Slater & Gordon lawyer.
The lawyer, James Naughton, suggested the possibility of action against planners and accountants following the failure of a class action by investors against the failed Timbercorp.
He suggested that investors who borrowed money from Timbercorp Finance might still be able to recover some of their losses, despite the High Court on Friday dismissing a class action against Timbercorp when it refused to grant investors leave to appeal an earlier Victorian Court of Appeal decision.
Around 14,500 investors borrowed a total of $477.8 million from Timbercorp Finance to invest into Timbercorp before the managed investment scheme collapsed and was placed in liquidation in 2009. Commenting on Friday’s High Court decision, Naughton said the High Court’s decision was not the end of the road for Timbercorp Finance investors, but suggested their options were increasingly limited and urged that the borrowers carefully consider their options and seek legal advice.
“One option may be for investors to consider whether they can recover losses against their financial planner or accountant in circumstances where the advice provided to them to invest in an agribusiness scheme was inappropriate, especially in circumstances where the risks of investing in their scheme were not adequately disclosed,” he said.
Naughton said the strength of these claims would depend on the advice provided and it was important to get an objective view on those matters before considering litigation.
“There are strict time limits that apply to investors making claims against their advisers. Once the time limit expires, investors may be completely barred from bringing a claim, even if that claim had good prospects of success,” he said.
In the meantime, a group formed to represent grower borrowers impacted by the Timbercorp collapse, the Agricultural Growers Action Group, has called on the major creditor, the ANZ, for a negotiated settlement.
AGA chairman Neil White said the group would continue to fight for a negotiated settlement with the ANZ and that he was confident of striking a deal with the ANZ bank if commercial logic prevails.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
