Litigation funder IMF (Australia) has agreed to fund a second group action by investors in Great Southern Plantations.
According to IMF managing director Hugh McLernon, around 1200 investors in Great Southern Plantations from 1998 to 2003 who exchanged their woodlot interests in Great Southern Limited during the course of Project Transform are eligible to join the action.
"More than 100 people have joined and their claim will be for $30 to $400 million odd," McLernon said.
The agreement to fund the legal action in the Western Australian Supreme Court (WASC) is subject to specific factors set out in the funding documentation and is subject to a level of investor participation acceptable to IMF.
Four months before it called in the administrators in May 2008, Great Southern announced the restructuring program called Project Transform. It created a company with three business streams: forestry, agricultural investment services and cattle.
The restructure was facilitated through a series of proposed transactions to acquire the interests of investors in selected Great Southern pulpwood and cattle managed investment projects in exchange for new shares to be issued by the company.
"They attempted to change the constitution of eight schemes, but only the two cattle schemes were actually changed. They needed a 75 per cent vote and that is why all of the cattle scheme interests were transferred to Great Southern," McLernon said.
"The other six, which were the woodlots, didn't get a 75 per cent vote. So they bought the interest of the individual members in exchange for shares."
In June 2009, IMF agreed to fund a class action on behalf of investors in the cattle schemes.
According to McLernon, this is still ongoing and there will be a preliminary hearing in the WASC next week.
