Prime Trust Action Group Unitholder Update No. 19 – 1 October 2012
On 21 August 2012, ASIC commenced civil penalty proceedings in the Federal Court seeking disqualification orders and pecuniary penalties against five former APCH Directors (Mr Wooldridge, Mr Lewski, Mr Jaques, Mr Clarke and Mr Butler) and a declaration that APCH breached its statutory duties. Since that time, there have been several Directions Hearings, culminating in an application by the above former Directors to transfer the ASIC Proceedings to the Supreme Court of Victoria. ASIC had opposed such a move. Unitholders will be pleased to note that the Federal Court's Justice Murphy has ruled in favour of ASIC and dismissed the defendants' application.
We also note that Justice Murphy has suggested that the ASIC Proceedings should be expedited and a provisional hearing date of 4 April 2013 has been mentioned. Whilst unitholders may consider that an earlier hearing date would have been preferable, we had been concerned that a transfer of this matter back to the Supreme Court may have led to considerably longer delays. We are therefore pleased that the ASIC proceedings will remain in the Federal Court and that the hearing date has been expedited.
Listing Fee Compensation Proceedings
On 3 August 2012, APCH (by the Receivers) lodged a Statement of Claim in the Supreme Court of Victoria seeking compensation in relation to the alleged improper payment of the $33m listing fee. The defendants in this matter are as follows:
Former APCH Directors
Mr Michael Wooldridge Mr Peter Clarke
Mr William Lewski Mr Mark Butler
Mr Kim Jaques Mr Philip Powell
Mr Anthony Hancy Mr Neil Rodaway
Entities Associated with Mr Lewski
Daytree Pty Ltd Carey Bay Pty Ltd
Australian Property Administrators Pty Ltd
Entities Associated with Kidder Williams, APCH’s Corporate Adviser
Kidder Williams Limited Kidder Communities Pty Ltd
Mr David Williams
APCH’s Legal Adviser
There has been some discussion, but as yet no decision, as to whether the Listing Fee Compensation Proceedings may be stayed pending the outcome of the ASIC Proceedings.
We understand that a second round of Public Examinations will be conducted in the Supreme Court of Victoria during 15 – 19 October 2012. We would expect a number of former APCH Directors, a number of advisers to APCH, and other parties, to be called to give evidence.
There have been press reports suggesting that the Examinations will focus on how the village management rights (previously a Trust asset) came to be acquired for no consideration by interests associated with Mr Lewski and then on-sold for $60m. Representatives of the Prime Trust Action Group will attend the Public Examinations and we will provide a summary of the Examinations in due course.
On 29 August 2012 at a directions hearing in the Appeal, the Supreme Court was informed that the Liquidators were refining their appeal and limiting it to the question of the extent of one of the Secured Creditors’ security over Trust assets and their ability to exercise control over those assets. The appeal, if successful, may mean that many of the matters currently under the control of the Receivers (including the Listing Fee Compensation Proceedings and potentially other proceedings) would revert to the Liquidators. As a first step, the Court has ordered mediation between the parties (the Liquidators and the Receivers) to occur by 31 October 2012. If the matter proceeds to hearing, the earliest possible timing is likely to be the first quarter of 2013.
The Court was also informed, and we are pleased to note, that the Liquidators will not appeal the earlier Court decision to dismiss the proposed action by the Liquidators (together with interests associated with Mr Lewski) against Lend Lease Primelife.
Sale of Villages
Recent press reports suggest that the recent attempt to sell seven of the Trust’s retirement villages was unsuccessful. We continue to believe that Lend Lease Primelife does not have proper title to the Trust’s management rights and that this factor may be contributing to a lack of interest in the villages.
There has been widespread media coverage of Prime Trust in recent months. A selection of articles is attached and additional articles may be viewed by visiting our website.
Thank you once again for your continued support of the Prime Trust Action Group.
Prime Trust Action Group
1 October 2012