Timbercorp investors face $470m repayment bill over loans

Investors in failed forestry scheme Timbercorp could be forced to repay more than $470 million in outstanding loans to the company's liquidators after the Victorian Supreme Court dismissed an appeal by one investor.

Allen Rodney Woodcroft-Brown led a class action seeking to recover more than $300 million from Timbercorp's finance arm, Timbercorp Finance, on behalf of affected investors.

The Court of Appeal upheld an earlier trial judge’s ruling and dismissed claims that Timbercorp directors failed to disclose significant risks to investors relating to the forestry schemes.

Yes. Ron Willemsen, who represented the lead investor, said the investor group was considering an appeal to the High Court following the Court of Appeal’s decision.

According to the investor’s representative, Mr Woodcroft-Brown could be forced to pay the costs of the trial and appeal, but the total cost exposure remained undetermined at the time of the report.

Timbercorp collapsed in 2009 just after the global financial crisis. As a result, its managed investment schemes could not be carried out, leaving many investments of limited or no value.

After the collapse, liquidators attempted to recover funds lent to investors through recovery actions. Those actions sought to reclaim some of the money lent to about 14,500 investors to fund investments in Timbercorp’s forestry managed investment schemes.

Mr Woodcroft-Brown alleged Timbercorp failed to disclose risks tied to its financial structure and that the group could fail because it did not have sufficient cash — claims the courts have so far dismissed.