Thousands of Great Southern investors who received now-worthless shares in the company in exchange for their woodlots have received the backing of litigation funder IMF to pursue a claim.
Thousands of Great Southern investors who received now-worthless shares in the company in exchange for their woodlots have received the backing of litigation funder IMF to pursue a claim.
The class action mirrors one announced by IMF in June on behalf of former cattle investors who were given shares in the agribusiness provider in exchange for their cattle assets.
In 2008, Great Southern commenced a restructure program called 'Project Transform' to acquire the interests of investors in selected pulpwood and cattle schemes in exchange for shares.
Sufficient numbers of investors in two cattle projects agreed to the proposal, leading to a compulsory exchange for all affected investors.
The woodlot proposal - for Great Southern Plantations schemes from 1998 to 2003 - did not attract sufficient interest for Great Southern to make the exchange compulsory.
But it is understood roughly 30 per cent of investors, averaged across the schemes, did accept the exchange.
Shares in the one-time heavyweight of the agribusiness sector were trading at 12 cents when trading was suspended in early May. The debt-laden company was then placed into administration, followed by receivership - receiver McGrathNicol is currently winding up or securing bids for Great Southern's range of schemes.
The legal argument is expected to centre on the actions of the responsible entity, Great Southern Managers Australia, which is mandated to put investor interests first.
Proceedings will be issued in the Supreme Court of Western Australia.
The announcement is below:
NEW FUNDING AGREEMENT
GREAT SOUTHERN LIMITED (IN ADMINISTRATION)
1. The Board of Directors of IMF(Australia) Limited is pleased to announce that it has agreed to fund claims by those investors in Great Southern Plantations from 1998 to 2003 inclusive who exchanged their woodlot interests for shares in Great Southern Limited during the course of Project Transform.
2. Any proceedings will be issued in the Supreme Court of Western Australia in the form of a group action for damages against the Responsible Entity and the directors of that entity.
3. Investors who transferred their woodlots to great Southern Limited in return for shares in Great Southern are eligible to join the action which IMF will fund subject to the specific factors set out in the funding documentation and subject to a level of investor participation acceptable to IMF.
4. Will include the claim value in its Quarterly Case Investment Portfolio reports as they are published.
