Litigation funders IMF have spoken with Retail Adventures’ administrator Deloitte but no word on action yet
Monday, January 14, 2013/
Litigation funders IMF are waiting in the wings for the administrators of collapsed discount group Retail Adventures to finish up its investigations, saying it has approached the group about its interest.
However, the administrators said while there has been some initial contact, there are no ongoing discussions with IMF and no movement regarding litigation is underway.
“The administrators responded to contact from IMF very early in the administration process. This is not unusual. There have been no ongoing discussions and no identified actions being considered by any parties,” Deloitte spokesman Simon Rushton said in a statement.
IMF director of operations Clive Bowman told SmartCompany this morning the company is interested in having a look at the case, should the need arise.
“Once they’ve done their review, we’ve invited them to talk. That’s as far as it’s gone,” he says.
Retail Adventures was contacted by SmartCompany for comment this morning, but it deferred all questions to Deloitte.
Litigation can occur if a company is placed in liquidation and administrators believe legal action is viable for creditors. In the case of Retail Adventures, Deloitte administrator Vaughan Strawbridge is still investigating the company, so no conclusion has been made whether litigation is warranted or not.
The business was placed in administration last year, with creditors owed $270 million. Chief executive Jan Cameron is still looking to buy back the business.
Insolvency expert Cliff Sanderson, of Dissolve, says the investigation of possible litigation funding is not unusual, and happens in many cases even when the possibility of wrongdoing has not come up.
“It happens a lot in larger cases,” he says. “If the case looks like it’s a big one with potentially good returns, they will register their interest.”
“But it’s on the radar, and if indeed they are going to take action, there may be a reasonable chance of success – otherwise IMF wouldn’t be interested in having a look.”
The collapse of Retail Adventures has been an unusual one. Having bought the business out of receivership in 2009, Jan Cameron ran the company for a few years before entering administration last October.
The company has continued to operate through a licensing structure. Meanwhile, Jan Cameron has attempted to buy back the business, registering her interest through administrators and writing to suppliers in support of her bid.