Westpoint investors group to get 70% back

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8 March 2010

A new $13.5 million settlement for a group of 525 investors in the failed Westpoint group will see them recover an estimated 71 cents in the dollar.

The Australian Securities and Investments Commission (ASIC) initiated the class action in 2008 on their behalf in the Federal Court against Victorian Government-owned State Trustees.

ASIC successfully argued that State Trustees breached its duty to the holders of “mezzanine notes” issued by Market Street Mezzanine Ltd, a Westpoint company, and failed to comply with its obligations under the Corporations Act.

The settlement, ASIC’s fourth approved by the Federal Court, was reached without any admission of liability by State Trustees, which has until March 15 to pay.

The commission expects to distribute the settlement sum, plus interest earned, in the last week of August after claims are received.

Since November 2007 ASIC has launched 19 civil actions seeking to recover funds for investors in most Westpoint companies.