Family Cited in Prime Trust Suit
Sarah Danckert, The Australian, 27 December 2014
LIQUIDATORS to failed retirement village owner Prime Trust are pursuing the sons and wife of company founder Bill Lewski as part of a $100 million-plus lawsuit over the group’s 2010 collapse.
In a writ filed just before Christmas, liquidators to the $500m trust have added Mr Lewski’s wife Roslyn, and sons Joshua and Matthew to their claim for the return of money from the sale of the group’s management rights.
The amended claim filed in the Supreme Court of Victoria also alleges Mr Lewski, law firm Madgwicks and Kidder Williams founder and investment banking hotshot David Williams breached their fiduciary duties in allowing Mr Lewski to purchase management rights for allegedly zero cost.
Mr Lewski later sold the management rights to a Babcock & Brown vehicle for $60m.
In the latest salvo by the liquidators, it is alleged that Ms Lewski and Mr Lewski’s two sons received $60m from the sale of the group’s management rights to Babcock & Brown Communities. The management rights were later onsold to Lend Lease, which is being pursued in a separate claim by the liquidators.
Thousands of investors lost $560m in the group’s collapse that was allegedly the result of poor management by the company’s board in combination with falling commercial property prices during the global financial crisis.
The liquidators allege the sale of the rights to a third party, namely Mr Lewski, had profound ramifications for the trust.
“By encumbering the retirement villages with management rights conferred to a third party, the total value of the retirement villages owned by the Prime Trust fell by $118.98m,” liquidators Petr Vrsecky and Stirling Horne allege in the recently filed state of claim.
The liquidators claim the sale of the management rights to Babcock & Brown Communities by Mr Lewski meant Prime Trust had to pay ongoing management fees of more than $5m a year.
The liquidators are seeking “equitable compensation”, interest and costs.
The matter will be heard next year, though a date is yet to be set by the court.
Mr Williams has become embroiled in the bitter battle over the lost millions of Prime Trust after he was recruited by Mr Lewski to advise on the sale of the management rights to Babcock & Brown Communities.
Roslyn, Joshua and Matthew Lewski allegedly received the $60m from the sale of the management rights to Babcock & Brown from Mr Lewski.
Mr Williams did not return calls. Mr Lewski and his family also did not return calls.
The fresh claim comes after Mr Lewski and former health minister Michael Wooldridge lodged an appeal over a separate Federal Court ruling banning them as directors for 15 years in Mr Lewski’s case and two years and three months in Dr Wooldridge’s case.
Dr Wooldridge, Mr Lewski and three other company directors were found by the Federal Court to have breached their duties as directors after the board signed off on a $33m listing fee that was paid to Mr Lewski. The disqualification orders have been stayed ahead of the appeal.