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Thousands of Australian investors who took out loans through Timbercorp’s finance arm to invest in the failed agribusiness investment scheme could be relinquishing their legal rights by accepting a settlement offer.
Slater and Gordon professional litigation lawyer James Naughton has warned Timbercorp Finance borrowers to carefully consider the potential impact of settling their loans through a discount repayment offer.
“The opportunity to settle debt at a discount may sound attractive, but Timbercorp Finance borrowers should investigate whether accepting this offer will prevent them from pursuing further legal action,” Mr Naughton said.
Around 14,500 investors borrowed a total of $477.8 million from Timbercorp Finance to invest into Timbercorp before the managed investment scheme collapsed and was placed in liquation in 2009.
The liquidator has offered Timbercorp Finance borrowers a 15 percent discount if they repay their loans upfront and 10 percent for some part-payments.
Mr Naughton said most investors took out loans through Timbercorp Finance on the advice of their financial planners and accountants as a way of legally minimising their tax liabilities.
“Timbercorp was heavily marketed to investors. For their efforts, financial planners and accountants were rewarded with attractive commissions. Investors, on the other hand, have literally watched their investments go up in smoke and have been left with large debt that just keeps growing as interest continues to accumulate.”
Mr Naughton advised borrowers to proceed with caution and seek independent legal advice before accepting settlement. The offer expires at 5pm on 31 January, 2014.
Timbercorp was Australia’s leading agribusiness company with horticultural assets that included almonds, olives and eucalypt plantations.
In October last year the Victorian Supreme Court dismissed an investor class action against Timbercorp. Slater and Gordon was not involved in the class action.