Compensation actions against failed Trio Capital (Trio) fund, the Astarra Strategic Fund (ASF), are underway with two separate institutions seeking damages on behalf of investors.
Independent boutique advisory firm McGrathNicol, who is the acting trustee of the Astarra superannuation funds, is in the process of lodging part 23 of the Superannuation Industry Supervision (SIS) Act application to request financial assistance or potential compensation from the government.
"Some of them [the funds] are badly exposed to ASF. Equally, others are untouched and so there will be a range of outcomes," McGrathNicol chairman Tony McGrath said.
"At the same time there is a prospect that where funds have lost money, if we can prove they were lost through theft or fraud there is a pathway through part 23 of the SIS Act. So we're working on that process as well."
McGrath said a potential end outcome for the majority of Astarra super fund members will be a good to very good outcome, with some set to face an outcome of average to good.
"We're optimistic that the part 23 application will get some traction, and if it does, it will provide us with a significant pool to repair much of the damage," he said.
"Optimistically, if the part 23 is successful, we'll probably know before the end of the year and funds may flow as early as March next year."
Meanwhile, litigation firm Macpherson + Kelley Lawyers (M+K) has sent letters of demand on behalf of its clients to Trio liquidators PPB, requesting them to notify the professional indemnity insurers of Trio of compensation claims.
"These letters set out the civil law claims M+K proposes, pressing on behalf of investors who placed funds with the Astarra Strategic Fund," M+K principal Ron Willemsen said.
"These claims rest on the types of things ordinarily covered by the insurance policies, which responsible entities (RE) must carry under their Australian financial services licences. Such things are breaches of statutory duty along with conduct which is likely to mislead or deceive purchasers of financial products."
Willemsen said the claims are not based on fraud but are based on inadequate detail in the information presented in the product disclosure statement and complete non-disclosure of other things that ought to have been disclosed to investors.
Around 100 investors have signed up or are in the process of signing up to be represented by M+K.
Willemsen said the firm is also examining whether other parties, such as research houses who rated the Astarra products, might be joined as defendants to any proceedings that are filed in court.
On Friday, unitholders in 10 Astarra funds voted in favour of removing Trio as the RE of the funds, replacing it with The Trust Company.
