22 Jan Timbercorp and Great Southern: It's Crunch Time
Given the recent legal outcomes to Timbercorp Securities Limited and Great Southern Group it is clear that debts owed by individual investors to the various banks will need to be dealt with as soon as possible. After communications with various bank representatives in these matters, the consistent message is to open a dialogue of communication and not ‘stick your head in the sand’.
If you have clients facing these issues we can provide specialist assistance including alternatives to bankruptcy.
The End Game – How Can We Help?
We have been engaged by many investors under extreme pressure and facing the prospect of bankruptcy. One option is to engage SV Partners and allow us to prepare an Independent ‘Solvency Assessment and Ability to Pay’ report, and open negotiations with the liquidators to achieve a confidential settlement at terms that the investor can afford. The report essentially provides a detailed asset and liability assessment and the potential impact of bankruptcy. From this, the report can be relied upon to support any negotiation with creditors and outline various options available if these negotiations fail. Depending on an individual’s circumstances, there are alternatives to bankruptcy that client’s may not be aware of if they do not seek the right advice.
Should you or one of your clients require such advice following the impact of the liquidation of Timbercorp or Great Southern, please contact our insolvency experts on our confidential assist line on 1800 246 801 or contact one of our advisers.
Timbercorp Case Study – the issue:
Timbercorp Securities Ltd, responsible for 33 registered managed investment schemes, was placed into voluntary administration in April 2009 and subsequently went into liquidation in June 2009. This resulted in the suspension of company shares trading on the ASX and costing investors millions in losses. Approximately 14,500 investors borrowed a total $477.8 million from Timbercorp Finance to invest in these schemes and after a magnitude of legal actions and demands, the Liquidators of Timbercorp Finance are now ‘asking’ the investors to repay their loans by issuing 50-60 writs a week.
The impact on stakeholders:
The problem here is that the ‘assets’ purchased by these loans (namely trees) are basically worthless, causing most investors to contemplate bankruptcy and the fear of losing their homes. Following the High Court’s dismissal of a class action by investors against Timbercorp in April this year, investors are left with increasingly limited options of making repayments to cover their losses.