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BFCSA: Timbercorp Investor victims and Timbercorp Borrower victims: Mike Smith ANZ gets more bonuses for sub prime loans!!!

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Timbercorp victims set to sue financial planners, while liquidator presses for loans to be repaid

Date August 10, 2014

Ben Butler

http://www.smh.com.au/business/timbercorp-victims-set-to-sue-financial-planners-while-liquidator-presses-for-loans-to-be-repaid-20140810-102gco.html

Lawyers representing victims of failed forestry group Timbercorp plan to sue financial planners who reaped $92 million in commissions after advising their clients to invest in the company.  The move comes as Timbercorp liquidator KordaMentha ramps up the pressure on victims to repay loans they took out to finance their investment by launching a flurry of legal action in the Victorian Supreme Court.

Financial planning networks whose members sold Timbercorp products include the CBA’s scandal-plagued Commonwealth Financial Planning and Sentry Group, which is owned by the bank that financed Timbercorp, ANZ.  BusinessDay has seen loan application forms filled in by clients who used financial planners that have blank spaces where the investor’s assets and liabilities are supposed to be disclosed.Timbercorp paid planners and advisers commissions of up to 10 per cent of the investment, plus a trailing commission of 0.5 per cent a year on the loans taken out by their clients.

Since April, when the High Court upheld the validity of the loans after a failed class action, KordaMentha has lodged at least 49 lawsuits against investors, five of which have settled before reaching court.  In just three days at the end of last month KordaMentha lodged 11 lawsuits against investors, claiming a total of almost $4.8 million, which are due to come before the court for a first directions hearing on Friday.

Slater & Gordon lawyer Mark Walter said his firm was "starting to be retained by growers who are being sued".  "We’re starting to get instructions to defend the proceedings and, where appropriate, join third party financial planners and accountants who have advised the growers to invest in these products," Mr Walter said.  He said that on Friday he would be acting on behalf of four members of investor group the Agriculture Growers Action Group.  "The individual circumstances will have to be addressed on a case-by-case basis and it could get very expensive and complicated to unravel all the issues."

Investor Garry Bone, a steelworker from Geelong, said he lost about $120,000 investing in  Timbercorp.  "I borrowed $11,000. Currently it’s up to $24,000. So they’re not shy on chucking the interest on," he said.  Asked if he would be able to pay the money back, he said: "I’d have to get another loan to do it."

AGAG chairman Neil White said the financial services industry was facing a "tidal wave of litigation" that could result in major planning groups losing their licences.  He called on Mike Smith, the chief executive of Timbercorp’s financier, ANZ, to "instruct KordaMentha to cease recoveries against AGAG members and strike a commercial deal and all these problems disappear".

KordaMentha partner Mark Korda defended the lawsuits and said any benefits would flow through to Timbercorp’s unsecured creditors, not ANZ.  ANZ lent the money to Timbercorp’s finance arm, Timbercorp Finance, which in turn lent it to investors, many of whom were attracted by a generous tax deduction.

"After four or five years of legal issues these loans are due and payable," Mr Korda said.  "We're taking a selective group and we're putting them through the court process. We expect some of them will settle."  Mr Korda said KordaMentha had a process in place for investors experiencing hardship.

"We're pretty commercial guys, but we're not going to sit down and do individual deals with everyone.  "There is one rule, which is you get a 15 per cent discount, and if you can't pay there’s a process for that.  "We’re prepared to continue the litigation as long as it's commercially viable."

 

Comment: YES FRAUD EVIDENCE but "we will cut a 15% deal" then more bonuses for Mikey!!!
  

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