Rich prepares damages claim against Morningstar
The formermanaging director of Morningstar Australia, Graham Rich, is preparing to head back into court in order to make a multi-million dollar claim of damages over his dismissal from the research group last year.
Rich, who was dismissed by Morningstar late November after a dispute with its US parent, Morningstar Inc, will make a preliminary appearance in the Supreme Court on July 27, ahead of a final hearing on the matter towards the end of this year.
It is understood Rich will sue the five Chicago-based directors on Morningstar Australia’s board, as well as Morningstar Inc itself, for damages as well as for oppression of minority shareholding. Before his dismissal, Rich, through his company Fiduciary, owned about 40 per cent of Morningstar’s Australian business.
Last November, Rich filed an injunction in the Supreme Court in an attempt to thwart Morningstar Inc’s attempts to bring about his dismissal.
But the court ruled against Rich after Morningstar Inc. claimed that it would hold back crucial funding for the group’s Australian operations if Rich continued as managing director, potentially pushing Morningstar Australia into liquidation.
It is understood Rich will now argue that the failure of Morningstar Inc. directors to approve a similar capital injection last September, two months before Rich was dismissed, severely impeded his ability to function as managing director.
At the time of going to print,Money Managementhad not heard back from Morningstar about its latest legal entanglement with its former managing director.
Since Rich’s dismissal, Morningstar Australia has announced that it would close both its Brisbane office, founded by Rich in the early 1990s, and its Christchurch office in New Zealand.
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
