Trustee of collapsed debenture insurer faces class action
Australians impacted by the collapse of debenture insurer, Provident Capital Limited are being invited to take part in a class action suit against the business' trustee.
Compensation law firm, Slater & Gordon, announced its plan to bring a class action against Australian Executor Limited, the trustee of Provident, after being approached by "hundreds of people who lost their money investing" in the company.
Slater & Gordon senior class action lawyer, Odette McDonald, said many retirees had lost their savings as a result of the collapse of Provident.
"The trustee was obliged under the Corporations Act to protect the interests of debenture holders," she said.
"In particular, the trustee was required to exercise reasonable diligence to ascertain whether Provident would have sufficient property available to repay debenture holders when their investment came due."
McDonald said Australian Executor failed in its duties, and the class action will seek compensation for the losses suffered by investors as a result of the trustee's contraventions of the Corporations Act.
The class action will be brought on behalf of investors who acquired new debentures issued by Provident on or after 22 December 2010 and who have not been repaid the amount that they invested in full.
However, the class action may be extended to cover debentures issued by Provident after 24 December 2008.
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