The door has been opened for legal action against Lehman Brothers Australia, including action by New South Wales Councils and others that lost money in products promoted by the group.
The Federal Court has found that a Deed of Company Arrangement (DOCA), which had prevented such legal action by the councils and other parties, was not valid. The DOCA had prevented the councils and others from pursuing claims against various Lehman entities both in Australia and overseas, as well as preventing them from pursuing payment under various insurance policies, according to a statement from the group funding the litigation, IMF Australia.
“IMF will now fund those councils and other parties in litigation to recover monies lost when they invested in collateralised debt obligations arranged, issued and promoted by those Lehman entities,” the group’s statement to the Australian Securities Exchange said.
