Former investors in agribusiness firm Forest Enterprises Australia (FEA) have sought legal advice after receiving letters of demand for loan repayments, according to litigation firm Macpherson + Kelley.
"Macpherson + Kelley will be able to help the investors in resisting payments that are now being demanded of the investors by FEA," Macpherson + Kelley principal Ron Willemsen said.
"People that did have loans that they took in 2009 and 2010 are looking to us for advice in that regard, and of course people who didn't take loans will be looking for compensation for their own money they put into these investments when FEA was facing its dying days, and from the investors point of view, these were meant to be long-term projects."
Willemsen said an unknown number of clients had approached the firm after receiving letters of demand from FEA.
"We are now going to be talking steps against [FEA Plantations] and its responsible directors in relation to failure to disclose significant financial information to people that invested throughout calendar years 2009 and 2010," he said.
"We've examined quite a bit of material already that has been available through ASIC and the ASX (Australian Securities Exchange) and it appears to me that there is significant information that would have been of interest that should have been disclosed to investors or potential investors that hadn't been disclosed."
He said while the finger of blame had been pointed at fellow collapsed agribusiness groups Timbercorp and Great Southern, documents under review indicated FEA was in serious financial difficulty before the other firms collapsed.
"It seems that FEA were already in serious discussions with their own bankers and needed to put their own arrangements in place even before Timbercorp and Great Southern collapsed," he said.
"There is a significant date, which was the 23 April 2009, that was of course the date that the voluntary administrators were appointed to Timbercorp - Great Southern came later - and there were bank documents being signed between FEA and the banking syndicate to put further security in place for the bank and it would appear that a waiver was sought by FEA ahead of 30 June 2009 and the banks granted the waiver that was sought."
Willemsen said documents indicated FEA was relying too heavily on its sales revenue, which was 80 per cent down on managed investment scheme sales in the previous year.
In May this year, Deloitte was appointed as the receiver of FEA's wholly-owned subsidiaries FEA Carbon Pty Ltd and Tasmanian Plantations Pty Ltd.
