Investors in failed forestry scheme Timbercorp could be forced to repay more than $470 million in outstanding loans to liquidators after the Victorian Supreme Court threw out an appeal by one of the investors.
Allen Rodney Woodcroft-Brown led the class action against Timbercorp to recover more than $300 million from its finance arm, Timbercorp Finance.
But the Court of Appeal on Thursday upheld an earlier ruling by the trial judge, dismissing claims that Timbercorp directors had failed to disclose significant risks to investors relating to the scheme. Ron Willemsen, who represented Mr Woodcroft-Brown in the Supreme Court, said the investor group was considering an appeal to the High Court.
He said Mr Woodcroft could be forced to pay for the cost of the trial and appeal, but that the cost was so far undetermined.
Timbercorp collapsed in 2009, just after the financial crisis. As a result, the managed investment schemes could not be carried out, meaning the investments were of limited or no value.
After the collapse, liquidators have tried to recover some of the funds lent to 14,500 investors through recovery actions.
The money was lent to the group to fund investments in Timbercorp’s forestry managed investment schemes.
Mr Woodcroft-Brown alleged Timbercorp failed to disclose the risk associated with its financial structure and the fact that the group could fail because of insufficient cash.