ASIC has reached an agreement to settle a class action against Glenhurst Corporation and its insurer QBE Insurance Australia for $2.5 million.
The agreement between the corporate regulator and Glenhurst marks the fifth Westpoint-related settlement.
The settlement of the class action is subject to the approval of the Federal Court.
If the Court approves the settlement it is anticipated that the liquidators of Glenhurst will distribute compensation to clients within its class action, known as group members, in September this year.
Under the terms of the agreement, QBE will have to pay $2.5 million to Glenhurst.
The liquidators will then distribute this amount among group members, less their costs and expenses.
The liquidator's costs and expenses will be no more than $24,578.
The Court will hear submissions for and against the approval of the settlement at 9.30am on 24 June 2010.
The class action, which was initiated against Glenhurst in the Federal Court in August 2008, seeks compensation for Glenhurst clients who invested in certain financial products issued by various companies within the failed Westpoint Group on the advice of Glenhurst.
The claim alleges that Glenhurst in providing such advice was negligent, engaged in misleading and deceptive conduct, and acted in breach of conditions of its Australian financial services licences.
Glenhurst had 98 unsecured creditors seeking more than $7 million and four priority creditors seeking more than $60,000, according to the statements from the firm's liquidator CJL Partners.
If the Court approves the settlement, group members will lose any rights to take action against Glenhurst in the future in connection with Westpoint Products.
In June 2009 ASIC initiated an action against QBE in the Victorian Supreme Court seeking an indemnity under the terms of Glenhurst's professional indemnity insurance policy, in respect of the claims made in the class action.
