IMF looks to fund class action over failed Retail Adventures
Kathmandu founder Jan Cameron is now the target of litigation funder IMF over allegations of insolvent trading by Retail Adventures, the failed discount retailer she acquired out of receivership in 2009.
IMF announced on Tuesday it intended to fund an investigation, public examinations and legal proceedings to recover losses incurred by unsecured creditors of Retail Adventures who are owed $165 million. It said it was approached by an action group set up by creditors called Retail Adventures Creditors Unite.
"They've approached us as they have concerns about the way the administrator is excluding them from the process," IMF executive Paul Rainford said.
Most of the debt relates to suppliers who face a zero return from the sale of Retail Adventures back to Ms Cameron this month for $59 million.
The amount will be credited against Ms Cameron's secured debt over the business totalling $77 million. This secured debt is one of IMF's targets. "The claims relate to allegations of insolvent trading by Retail Adventures and the enforceability of securities held by companies associated with Jan Cameron," IMF said in a statement to the stock exchange.
IMF said funding was conditional on a sufficient number of unsecured creditors executing the agreement. It is understood it needs creditors with $40 million worth of claims to sign on before it can proceed.
It also needs creditors to vote to put the company into liquidation at the second creditors' meeting in August.