Court approves $13.5m Westpoint deal

More than 500 investors in failed property group Westpoint are set to receive a total of $13.5 million after the Federal Court today approved the settlement.

The settlement, first secured in December, is the Australian Securities and Investments Commission's fourth approved deal in relation to its Westpoint compensation proceedings.

The settlement with Melbourne-based trustee State Trustees Ltd allows about 525 eligible investors to submit a proof of claim to take part in the distribution of settlement funds.

ASIC commenced proceedings against State Trustees in March 2008.

As the trustee of unsecured mezzanine notes issue by Westpoint's Market Street Mezzanine Ltd, which was placed in liquidation, State Trustees breached its duty to the note holders and failed to comply with its obligations under the Corporations Act, ASIC alleged.

"It is estimated that group members should ultimately recover approximately 71 cents for every dollar they invested in the mezzanine notes," ASIC said in a statement today.

About 3,000 Westpoint investors were left $388 million out-of-pocket when the group unravelled, beginning in late 2005.

ASIC has commenced 19 civil actions seeking to recover funds for investors in the majority of the Westpoint companies.

It has reached settlement with Masu Financial Management Pty Ltd, Professional Investment Services Pty Ltd and Bongiorno Financial Advisers Pty Ltd.