This article is from the Australian Property Journal archive
THE Australian Securities and Investments Commission has reached a settlement with KPMG, recovering $67.45 million on behalf investors who lost $388 million following the collapse of the Westpoint Group.
As part of the agreement, $57 million will be made available in the next 30 days with the balance available to the liquidators of the relevant companies subject to a number of conditions which are confidential.
In total investors are expected to see a return of around $160 to $170 million of the $388 million in losses following this settlement, which is on top of the $25.5 million paid by the State Trustees Limited and a number of financial planners, as well as $49.2 million obtained through the liquidation process.
Returns from Westpoint companies not in liquidation are expected to reach $22.5 million.
ASIC’s chairman Tony D’Aloisio said this settlement will avoid the delays associated with conducting the proceedings through to a trial in September 2011 and provides an additional return for investors in the plaintiff mezzanine companies who lost money as a result of the collapse of the group in 2005.
“A confidential commercial resolution is, because of the age and circumstances of the investors, the preferred resolution in a case such as this where litigation can take years. This view has been shared by parties involved who have engaged in constructive and bona fide discussions to resolve these issues,” he added.
The settlement will bring to an end the current Federal Court proceedings, which began in 2006 following the collapse of Westpoint.
ASIC used its powers under the Corporation Act to launch legal action against companies and financial advisers on behalf of investors in nine of the Westpoint mezzanine companies. The nine Westpoint mezzanine companies are:
· Ann Street Mezzanine Pty Ltd
· Bayshore Mezzanine Pty Ltd
· Bayview Heritage Mezzanine Pty Ltd
· Market Street Mezzanine Ltd
· Market Street Mezzanine No. 2 Pty Ltd
· Mount Street Mezzanine Pty Ltd
· North Sydney Finance Limited
· York Street Mezzanine Pty Ltd
· Cinema City Mezzanine Pty Ltd
Australian Property Journal
