Fincorp Investors v Sandhurst Trustees
Slater & Gordon Launch Class Action Against Sandhurst Trustees, Over Group's Role In Collapse of $200m Fincorp Property Empire
Fincorp investors claim Sandhurst should have been aware the company was in financial difficulties as early as December 2004 - - more than two years before it collapsed.
In a statement of claim filed in the Federal Court, Slater & Gordon claims Sandhurst failed to "actively monitor" the financial position of Fincorp.
Litigators claim Fincorp failed to obtain current valuations of the development land owned by the group and failed to obtain and review current cash flow projections for the group.
If Sandhurst is found to be at fault, a claim could range between $20m and $120m, depending on when a breach of duty was found to have occurred.
Fincorp's 7800 mainly elderly investors had $201m invested in the group when it collapsed in March 2007.
Secured investors, who had $178m invested in the group, recovered 50c for each dollar invested after Fincorp receiver KordaMentha sold 10 of the group's assets, mostly incomplete property developments, to Becton Property Group and AV Jennings, for $204 million six months after the collapse.
Unsecured investors, who had $23m invested in the group, have received nothing.
Slater & Gordon alleges that Sandhurst "was aware or ought to have been aware" by December 2004 that Fincorp held $41.4m in investor funds that were due to be repaid within one year, but that subsidiary Capital First had a working capital deficiency of $54.4m.
For more information please contact:
Slater & Gordon
1800 555 777
Level 1
71 Leichhardt Street
Kingston ACT 2604
