Banksia Securities class action nears settlement

Banksia Securities class action nears settlement
Banksia Securities class action nears settlement

The trial of the Banksia Group proceedings which had been scheduled to commence in February 2018 has been vacated by the Supreme Court of Victoria. 

Instead the court will be hearing the plaintiff’s application for the approval of a settlement.

It has been listed for 30 January 2018 before the Honourable Justice Croft of the Supreme Court of Victoria.

Banksia investor Laurence Bolitho of Kyabram was the lead plaintiff in the case which was scheduled to run for 2.5 months.

The plaintiff has entered into a settlement of his claims made against the trustee in the Banksia Group proceedings. The plaintiff’s claim against the trustee was to recover a sum in excess of $200 million (inclusive of interest from 24 December 2012).  The settlement will only take effect if it is approved by the Supreme Court of Victoria.

As well as settling the Plaintiff’s claim in the Banksia Group Proceeding, Banksia’s own claims against the trustee brought in a separate proceeding (“Liquidators’ proceeding”) will be settled as part of the settlement. Banksia’s claim against the trustee is for approximately $170 million.  The loss claimed by Banksia overlaps with the Plaintiff’s claim in the Banksia Group Proceeding.  The law prevents debenture holders recovering more than the total amount of their loss.

To settle the claims made in both the Banksia Group Proceeding and the Liquidators’ proceeding, the trustee will:

  • pay $64 million;
  • release Banksia from an existing claim for $3.96m for additional remuneration in respect of additional work performed by the trustee in a period of 16 months from 25 October 2012 to February 2014; and
  • release Banksia from any further claims for remuneration (as yet unquantified).

Subject to their agreeing to keep its contents confidential, group members represented in the Banksia Group Proceeding are entitled to inspect the deed of settlement.  

The Plaintiff has not settled his claims made against Banksia itself, however, the prospect of any recovery from Banksia is uncertain as Banksia has been placed into liquidation.

Meanwhile Banksia is pursuing claims against its insurance broker and insurers and Banksia is hopeful of recovery in those actions. 

The Liquidators (acting as Special Purpose Receivers) hold approximately $14 million.

Tags: 
Court Case Banksia

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