More than 2400 Timbercorp investors have been given the green light by the Supreme Court of Victoria to begin legal proceedings against the collapsed agribusiness firm and its directors.
Macpherson + Kelley (M+K) can now run the class action it originally launched in May last year. The action seeks compensation for investors who borrowed to buy into the company's investment schemes in 2007 and 2008.
"The granting of leave to proceed against Timbercorp Securities and Timbercorp Finance is obviously an important step in the process, as it will allow investors to continue to fully pursue compensation claims against the companies and the directors and challenge the validity and enforceability of the relevant loans," M+K principal Ron Willemsen said.
The proceedings were originally commenced against Timbercorp Securities (in liquidation) and its former directors Gary Ladel, Robert Hance, Sol Rabinowicz and Timbercorp Finance (also in liquidation) on 28 October 2009.
The case was adjourned to 2 March 2010 after Timbercorp Securities drew attention to "difficulties with a statement of claim".
However, Judge Judd overturned the objection made with respect to the "related circumstances" of the parties.
"I am persuaded that leave should be granted subject to the usual condition that claimant shall enforce any judgement for the payment of money ... without leave of the court," Judd said.
As a result of the judgment, M+K will also have access to Timbercorp documents to assist with preparation for the case.
"Our clients are clearly pleased that leave to proceed has been granted," Willemsen said.
M+K allege Timbercorp engaged in misleading or deceptive conduct with regards to the company's finances.
"Growers in the Timbercorp project were not told in 2008 of serious doubts about Timbercorp's ability to survive. Timbercorp sent out its invoices for management fees pretending that it was business as usual. Most investors paid up, often taking out loans with Timbercorp Finance to meet the bills," Willemsen said in May 2009.
Timbercorp went into voluntary administration on 23 April 2009 with debts of $903 million.
