Bendigo Bank class action settled

BENDIGO and Adelaide Bank has reached agreement to conclude the class actions brought by investors in managed investment schemes operated by Great Southern.

The bank has released a statement, which reads:

"Under the agreement, which is subject to approval of the Court, the bank’s borrowers who are members of the class actions have admitted that their loans are valid and enforceable and have provided broad releases from future litigation. 

The principal and ordinary accrued interest remains payable by borrowers. However, the Bank has agreed to waive unpaid interest relating to overdue amounts, being the interest (additional to ordinary interest) that is payable by borrowers in default, which is accrued and unpaid up to the date the Court approves the settlement. 

This waiver will not result in any adjustment to the accounts of the Bank as unpaid interest relating to overdue amounts has not previously been recognised as revenue.''

Bendigo and Adelaide Bank managing director, Mike Hirst, said he was pleased with the settlement. 

“We have always maintained that the Bank’s conduct was at all times appropriate and the Bank is entitled to be repaid its loans to Great Southern borrowers,'' he said.

“The terms of this agreement endorse this position and we look forward to working with the borrowers as they repay their debts to us.''

Borrowers can contact the Bank on 1300 677 885 to discuss the repayment of loans.

In June, 2010, the Bendigo Advertise reported that Bendigo and Adelaide Bank was being sued in a class action filed on behalf of investors in Great Southern’s managed investment schemes.

Macpherson and Kelley Lawyers launched the class action late last week on behalf of almost 1700 investors who are also seeking damages to recover principal and interest paid for loans for entry into the agribusiness managed investment scheme.

Great Southern Finance, which is in liquidation, three of the company’s directors and former directors, and Javelin Asset Management have been included in the writ.

The class action also covers cash investors who bought interest in projects sold by Great Southern Managers Australia Limited.

Law firm principal Ron Willemsen is in charge of the case and said there were several key elements to the lawsuit.

“The package offered to investors included a finance option.

“There was a very close interconnectedness between GSMAL and Great Southern Finance in the joint promotion of forestry and non-forestry projects to potential investors.

“If the court rules that loans obtained by investors from Great Southern Finance could not be enforced then Bendigo and Adelaide Bank and Javelin Asset Management would similarly be unable to collect on loans they acquired from Great Southern Finance.”

Bendigo and Adelaide Bank managing director Mike Hirst said that after months of claims by the lawyers the bank anticipated its day in court.

“We now look forward to demonstrating through the court what we have always argued - specifically that these loans are legitimate and are required to be repaid by these investors.”

The class action involves forestry, olive, almond or cattle projects between 2005 and 2008.

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