The proposed settlement with Fincorp’s trustees, Sandhurst Trustees, may mean that even unsecured note holders, who received nothing through the liquidation and receivership of Fincorp, could be eligible to receive a return of some of their lost capital, Slater & Gordon litigation lawyer Odette McDonald said.
McDonald said the proposed settlement would benefit thousands of “mum and dad and retiree investors” who lost their savings when Fincorp collapsed.
“These people were led to believe, through clever marketing and other endorsements, that Fincorp was as safe as investing in a bank, when it clearly wasn’t,” she said.
“This proposed settlement is a victory for the thousands of small investors who were misled by Fincorp.”
To be eligible to participate in the proposed settlement scheme, claimants must have invested in secured and/or unsecured notes issued by Fincorp on or after December 7, 2004, held those notes as at March 23, 2007, and suffered loss or damage.
McDonald said the size and value of the settlement would be determined by the number of people who decided not to opt out of the open class action.
Slater & Gordon stated that it was able to pursue compensation from Sandhurst Trustees under a provision of the Corporations Act 2001, which deals with trustee responsibilities. This case represented one of the first times the provisions had been used to pursue compensation from a trustee following a corporate collapse and McDonald described it as a “significant legal milestone”.
The settlement was approved by Slater & Gordon’s clients, and was now be subject to approval by all group members and the Federal Court, the lawyer stated.
