Legal Proceedings Against Lend Lease and Other Parties

In our most recent Unitholder Update (No. 27), we referred to the legal proceedings brought by the Liquidators against several defendants (namely various Lend Lease companies and entities associated with Mr Lewski) in relation to the disputed management rights.

These proceedings were brought under section 588 of the Corporations Act, which provides special powers for Liquidators to void transactions in certain circumstances. In this case, the Liquidators are seeking to use those powers to void particular transactions relating to the management rights of the Trust’s retirement villages. As investors will recall, the Prime Trust Action Group has long disputed the circumstances in which these management rights were acquired by entities now owned by Lend Lease in a transaction which resulted in a $60m payment to interests associated with Mr Lewski.

The Liquidators lodged an Originating Process in the Supreme Court in October 2013 and were granted an extension of time until December 2014 to serve the defendants. After the defendants were served in November 2014, the defendants then applied to have the proceedings set aside and the matter was heard by Efthim AsJ in the Supreme Court of Victoria in March 2015.

We are pleased to report that Efthim AsJ recently released his judgment and dismissed the defendants’ application to have the matter set aside. This means that, subject to the outcome of further legal proceedings, it may be possible for the Liquidators to void transactions which we believe caused substantial detriment to, and contributed to the insolvency of, the Trust.

At this stage, we understand that Retirement Guide Pty Ltd, an entity associated with Mr Lewski, has lodged an appeal in respect of the judgment and it is possible that various entities associated with Lend Lease may also lodge appeals.

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