The liquidator of Great Southern Limited (GSL) and its subsidiaries has secured additional funding and indemnity cover to continue its investigations into the activities that led to the agribusiness firm’s collapse.
In a letter to creditors dated 18 February, Ferrier Hodgson said it had entered into a funding agreement to a limit of $115,000 for costs and fees in reviewing the sales agreement for Great Southern Property Managers Limited (GSPM).
“The liquidators of GSPM are of the view that the inclusion of these assets in the receivers’ sale process provides the best opportunity to maximise the realisable value for the liquidator-controlled assets,” the letter said.
“We have had the relevant assets independently valued and have now agreed a sales price with the receivers which is reflective of the values of the liquidator-controlled assets outlined in the valuations.”
Litigation funding firm Hillcrest Litigation Services (HLS) has also agreed to provide funding for further investigation.
“At this stage the HLS agreement only covers defined costs of the first state of our investigations of about $230,000 plus coverage for any adverse cost orders,” the letter said.
As well as covering Ferrier Hodgson’s costs, the HLS funding will be used to advance certain claims and recoveries the firm has identified from its investigations to date into GSL and its subsidiaries.
Ferrier Hodgson will also receive additional funding from ASIC after the corporate regulator approved two Assetless Administration Fund (AA Fund) applications with respect to GSL and Great Southern Managers Australia Limited (GSMAL).
“The AA Funding application with respect to GSL was lodged in July 2010 and the GSMAL AA Funding application was lodged in August 2010. We advise that we have now received a response from ASIC in relation to these request which indicates that AA funding will now be forthcoming,” the letter said.
An indemnity has been provided to GSMAL by the insurers of the former directors under their director and officer insurance policy to cover the costs of conducting a legal professional privilege (LPP) review of records produced to ASIC.
“The liquidators have been indemnified for their legal costs associated with the LPP review, and but [sic] have not [been] indemnified with respect to their own fees or other disbursements associated with the LPP review,” the letter said.
Save My Trees and Bendigo and Adelaide Bank have provided an indemnity to GSMAL as responsible entity (RE) in an amount up to $10,000.
Meanwhile, litigators involved in the class action against GSMAL will return to court on 11 March.
“We have our fingers and toes crossed that this time [the judge] will first of all able to deal with [the case] and second of all able to give us the green light to go ahead with it,” Macpherson + Kelley (M+K) lawyers principal accredited commercial litigation specialist Ron Willemsen said.
“We are determined to get there.”
It is M+K’s estimate that about 10,700 investors invested in the Great Southern 2005 plantation scheme and around 7780 invested in the 2006 scheme.
