The liquidator of collapsed investment company Elderslie Finance will launch an $18 million legal claim in the Federal Court in Sydney in the coming weeks against the company’s directors, including former Liberal leader John Hewson.
Amanda Barton, partner and Sydney law firm Piper Alderman, will handle the case on behalf of liquidator Nicholas Crouch.
Barton told SmartCompany this morning that the case will focus on allegations the directors breached their continuous disclosure obligations to investors, claims regarding preferential payments and claims the directors knew the company was trading while insolvent.
“The insolvent trading claims date back to 12 months prior to the company’s collapse,” Barton says.
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“We are hoping to have [the case] filed in the Federal Court in the next few weeks.”
Elderslie Finance collapsed in July 2008 with debts of $400 million. Hewson was chairman of the company until one month before Perpetual Trustees launched legal action against Elderslie, leading to its collapse.
Nicholas Crouch was not available for comment this morning, but told The Sydney Morning Herald he believed the company was trading while insolvent for a “significant period” before its collapse.
”It is difficult to see how the directors of the Elderslie group would not have been aware of its financial difficulties during the period in which it continued to issue unsecured notes and debentures to its mums and dads investors and incurred debts, which remain unpaid.”
Attempts to contact John Hewson this morning were not successful.
Elderslie’s receivers, PricewaterhouseCoopers, told debenture holders late last year that the likely return on their investment was just 10c in the dollar.
One of Elderslie’s biggest assets was a $69 million loan to its parent company Hotel Nominees, which was owned by Elderslie’s former owner and director, Peter George.
George was declared bankrupt in February.