Prime Trust Action Group Unitholder Update No. 5 – 28 April 2011

Since our last update, we have continued to be inundated with registrations for the Action Group and would like to thank everyone for their continued support and encouragement. To date, around 5,800 unitholders have joined the Action Group, representing around 380m units or 66% of total unitholdings.

Unitholders may recall that Lawler Draper Dillon (LDD), as administrator, was originally scheduled to convene the Second Creditors Meeting by November 2010. Following an application to the Court by LDD, a six month extension was granted, thereby deferring the Second Creditors Meeting until May 2011. At this Second Creditors Meeting, creditors (including unitholders) will be asked to vote on the Trust’s future.

On 18 April 2011, the Action Group was advised by LDD that it would be seeking, later that same day, a further extension of six months. As we were only given three hours notice of the Court hearing in Melbourne, and as the Action Group principals reside in Sydney and Perth, It was therefore not possible for the Action Group to make any representations in this matter, and the Court duly granted a further extension of six months. The Second Creditors Meeting is now required to be held by November 2011. Naturally, the Action Group is disappointed with this second extension, especially in light of the fact that many detailed investigations had been completed by the Action Group and provided to LDD, thereby significantly reducing the amount of time required to be spent on investigations by LDD. The Action Group is also disappointed that it was denied the opportunity to make representations on this matter before the Court granted a further extension.

On a brighter note, LDD has confirmed that all unitholders will be able to be treated as contingent creditors when it comes time to vote at the Second Creditors Meeting. Given the strong support for the Action Group, this clearly gives us a strong voice at the Second Creditors Meeting and the ability to defeat any proposals that may be put forward which are not considered to be in the best interests of unitholders.

In order to be recognised as a contingent creditor, it will be necessary for each unitholder to complete a Proof of Debt Form. There is no need to complete this form at present as the Second Creditors Meeting is several months away. We will coordinate the lodgement of these forms in plenty of time before the meeting. At the same time as we coordinate the Proof of Debt Forms, we will also coordinate the lodgement of Proxy Forms for those unitholders who are unable to attend the Second Creditors Meeting which is expected to be held in Melbourne.

Our previous Unitholder Update indicated that the Action Group had provided an extensive list of serious concerns about the Trust, and the alleged mismanagement of the Trust, to LDD on 6 December 2010. Although we had been promised a substantive response by 31 January 2011, we have only recently been provided an incomplete response.

The Action Group continues to be frustrated with the slow progress of the administration and has made representations about the process being adopted by the administrator in gathering evidence in relation to some of the issues. The Action Group principals are expecting to travel to Melbourne at the end of next week for a comprehensive meeting with LDD. This meeting will also be attended by Clarendons Lawyers who have been providing invaluable assistance to the Action Group. We expect the meeting to cover in detail the progress to date in investigating all the serious allegations which have been raised by the Action Group.

We would like to again thank the hundreds of unitholders who submitted complaint letters to both ASIC and their local Federal Member of Parliament. We understand that there is a growing interest in Canberra to investigate the unprecedented collapse of the Trust (and attendant unitholder losses of $500 million) and there are several MPs who have indicated to us that they are prepared to raise this matter in the House of Representatives, the Senate or at Parliamentary Committee meetings. A number of MPs are also planning to conduct public meetings in their electorates to discuss the Prime Trust debacle.

For any unitholders yet to lodge their complaint letters, we would urge you to do so at the earliest opportunity and we can assure you that the letters are making a difference to our campaign and generating further momentum for the appropriate investigations to be undertaken. In lodging your complaints, you are welcome to use the attached standard letters and edit as appropriate to include your personal details, the name of your local member etc. (If anyone experiences difficulty in preparing the letters, please send an email  and we will send the letters to you for signing).

Thanks also to the large number of unitholders who came forward recently to help with our mailout exercise. We were delighted that we had a surplus of unitholders and we hope that those whose services were not required this time will once again come forward when the next opportunity arises.

We continue to believe that all of the allegations we are making will see the full light of day and be judged accordingly, and that all parties who are found to have acted improperly will be held accountable for their actions and pursued to the full extent of the law. Thank you once again for your support and please remember to regularly check our website for further news: www.primetrustactiongroup.com.

Prime Trust Action Group
28 April 2011

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