IMF Australia will earn profits of around $1.5 million after reaching a conditional settlement with dealer group Professional Investment Services (PIS) over Westpoint actions.
IMF started funding the case four years ago for certain Westpoint investors against PIS.
The litigation funder will receive about $3.25 million of revenue and generate around $1.5 million in profits before tax and after capitalised overheads, an IMF statement said.
The terms of the settlement of which IMF funded were confidential between the parties, IMF investment manager Charlie Gollow said.
The settlement is also conditional upon dismissals of the proceedings.
In 2006, IMF began funding the case against PIS on behalf of 55 clients who were advised by PIS's authorised representatives to invest in the Ann Street mezzanine product of the failed Westpoint Group, Gollow said.
The case was due to return to the New South Wales Supreme Court today however as both parties agreed to a conditional settlement it will not go ahead, he said.
IMF expects the majority of the settlement to be paid to Westpoint investors in the financial year ended 30 June 2011.
Gollow said IMF expects to resolve the last of its three Westpoint cases in the "near future".
The remaining action is between a group of investors who were advised to put money into Westpoint products by authorised representatives of financial advisory firm Quantum Securities, a group that is now in liquidation, he said.
PIS was unavailable for comment by InvestorDaily's deadline.
