ACR class action drives $25m settlement
Australian Capital Reserve (ACR) investors who joined in a class action against the Trust Company (Nominees) Limited stand to share in a settlement valued around $25 million,
Plaintive law firm, Slater and Gordon, has announced a conditional settlement of the class action which says, subject to Federal Court approval, will see the Trust Company pay a total of $25 million, including legal costs, to be shared among class action group members.
The settlement was reached three weeks before the matter was due to come to trial.
Slater and Gordon brought the Federal Court claim in May 2013 on behalf of more than 4000 retail investors who invested in ACR between 17 November 2005 and the company's collapse on 28 May 2007.
The class action alleged that the Trust Company, which had been appointed as a trustee to protect ACR's investors, breached its duty of care.
Between 2000 and mid-2007, ACR raised money by issuing debentures to the public. It used the money to make loans to other companies in its company group, the Estate Property Group, for use in property development.
The class action alleged that Trust Company should have investigated problems with the Estate Property Group's finances and its property development business and stopped ACR from issuing debentures by no later than 17 November 2005.
ACR collapsed in May 2007 owing millions of dollars to approximately 7,000 Australian retail investors.
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