Second Places Victoria Official Grilled on Trust Collapse
Unitholders may be interested to read the attached article in The Age dated 7 September 2012.
Mr Peter Clarke, a former APCH Director, recently stood aside from his position as Chairman of Places Victoria as a result of Court proceedings initiated by ASIC in relation to Prime Trust. The article notes that other Board members of Places Victoria have connections to Prime Trust, including Ms Lorna Gelbert, a Partner of Madgwicks.
Madgwicks were the legal advisers to Prime Trust over many years and much of this work was done by Ms Gelbert. We understand that Madgwicks acted for APCH in transferring, for no consideration, the village management rights from the Trust to Retirement Guide Pty Ltd (an entity associated with Mr Bill Lewski), and then acted for Retirement Guide Pty Ltd when that company sold the management rights to Babcock & Brown Communities for $60m.
As legal advisers to Prime Trust, Madgwicks had certain fiduciary responsibilities and obligations towards unitholders. Ms Gelbert provided sworn testimony that she did not consider unitholders when facilitating the transfer of the management rights to interests associated with Mr Lewski. These transactions not only led to Mr Lewski's Retirement Guide receiving $60m but also precipitated a large writedown in the value of the retirement villages.
We would also argue that Madgwicks had an untenable conflict of interest in representing both the Trust (unitholders) and Mr Lewski, and we understand that there was no attempt by Madgwicks to inform investors of this situation. Many investors have commented to us that they would not have invested in the Trust had they known that Madgwicks, the Trust's lawyers, were also Mr Lewski's personal legal representative.