Two thousand investors in failed Great Southern managed investment schemes will be forced to repay their loans after the Supreme Court of Victoria upheld a settlement that will see the investors get back just $23.5 million.
Two thousand investors in failed Great Southern managed investment schemes will be forced to repay their loans after the Supreme Court of Victoria upheld a settlement under which the investors got back just $23.5 million.
It confirms that the loans the bank made were valid and enforceable, with accrued interest also payable to the bank.
The bank has waived accrued overdue interest, and won’t pursue recovery of the loans for 30 days, managing director Mike Hirst said.
"Whilst we'd prefer prompt payment of the debt, we understand some borrowers might not be in a position to pay the full amount in that timeframe," he said.
"We're happy to work with people - and even refinance loans where that makes sense - to ensure they can meet their obligations without hardship."
Great Southern controlled 45 managed investment schemes before it collapsed in 2009, and at the time had more than 40,000 investors.
Borrowers will receive the $23.5 million payment mainly to reimburse legal fees, but it will not be funded by the bank.
The court decision today follows an ASIC investigation that found there was no systematic error in the financial advice given to investors in the schemes.
Justice Croft described the collapse as a tragedy for many people, including investors, shareholders and employees.