Legal firm Slater & Gordon has negotiated a proposed settlement scheme with the trustees of failed investment company Fincorp Investments, Sandhurst Trustees, in an attempt to compensate the individuals who lost money as a result of the firm’s collapse.
The proposed settlement has been struck as part of the class action Slater & Gordon brought against Sandhurst Trustees on behalf of Fincorp investors that commenced in August 2009.
Both secured and unsecured note holders of Fincorp will be eligible for payment from the proposed settlement, a result that was not facilitated when the investment company was originally placed into receivership and liquidated.
At the time of the liquidation investors holding secured notes received 55 cents in every dollar invested while unsecured note holders received no compensation.
However under the new compensation arrangement all note holders can receive a payment between six and 75 cents of their outstanding capital.
“This proposed settlement is a victory for the thousands of small investors who were misled by Fincorp,” Slater & Gordon litigation lawyer Odette McDonald said.
“What is particularly significant is that unsecured noteholders, who have received nothing through the liquidation and receivership of Fincorp and who thought that they had no chance of recovering any of their investment, will be eligible to receive a return of some of their lost capital under the proposed settlement scheme,” she added.
“The proposed settlement scheme has a sliding scale of compensation to reflect the strengths and weaknesses of different claims. If approved, the class action will result in a multi-million dollar settlement.”
Slater & Gordon received permission from the Federal Court to notify investors of the proposed settlement. Individuals who suffered losses may now choose if they want to participate in the settlement or opt out of the class action.
The settlement will not go ahead if a significant number of investors opt out of the class action.
The decision on whether or not to proceed with the settlement will be made by the court on 20 May this year.
