Team of Brisbane legal eagles hit with lawsuit seeking more than $17.5 million

THE liquidator of a failed Gold Coast funds manager has lodged a court claim seeking more than $17.5 million from a group including a team of Brisbane lawyers and the manager’s former CEO.

Illustration of David Tucker and Richard Cowen by Brett Lethbridge

A TEAM of Brisbane legal eagles have been hit with an extraordinary lawsuit seeking more than $17.5 million allegedly owing to dudded investors.

The liquidator of failed Gold Coast funds manager Equititrust lodged the claim in Brisbane Supreme Court this month against David Tucker and Richard Cowen, along with three other partners in their law firm Tucker & Cowen.

Former Equititrust CEO David Kennedy, Cowen’s firm TCS Solicitors, Tucker’s company Tuckerloan and related entity MS Asia Debt Acquisition are also named as respondents in the action brought by liquidator Blair Pleash from Hall Chadwick.

Former Equititrust CEO David Kennedy.

Pleash maintains the money rightfully belongs to the unitholders of a collapsed fund once controlled by Equititrust, which fell over in 2012 owing more than $260 million to about 1600 mostly senior investors.

The lawsuit alleges Tucker, Kennedy and a third individual, Neil Howard, used deceptive means and inside knowledge to wrongly acquire the outstanding loan book of the Equititrust Premium Fund for the rock-bottom price of just $2 million.

Equititrust Capital on the Gold Coast.

Tucker, a former Equititrust director, along with Kennedy and Howard, set up MS Asia in Hong Kong to buy the loan book and allegedly stood to reap a $14.4 million windfall profit.

The claim says $11.94 million was eventually split among the three gents.

Pleash, who has secured funding to pursue the litigation, is also seeking unspecified additional compensation and damages for multiple alleged breaches of fiduciary duty by all the parties.

In addition, court orders have been sought against other figures in the drama, including former Worrells Insolvency executive Michael Peldan and current Worrells operative Chris Cook.

PLANNING TO FIGHT

ONLY one of the respondents contacted by City Beat yesterday responded to our request for a statement.

“No claim has been served. In the circumstances it is not appropriate for us to comment,’’ Cowen said.

Kennedy, who is based in Hong Kong, and Peldan could not be reached. Obviously no defence has been lodged yet in the case but Tucker, who just returned from a few weeks of holiday in the UK, has previously denied any wrongdoing.

Indeed, if his comments are anything to go by, he and the others will be fighting it pretty vigorously.

“This matter has not raised it (sic) status beyond nuisance value and I maintain that the liquidators enquiries are misguided, and a waste of time and money,’’ Tucker told City Beat recently.

“The real story here is how much the liquidators are claiming for their fees and how little they have done… They have already claimed $900,000 plus GST but they have actually done very little except recover a tax refund of $2 million-plus.

“They had their hands out for another $1,432,000 but do not actually say what they really did or propose to do. This is just an exercise in fee generation – for lawyers and accountants.’’

Well, it’s pretty clear now what Pleash proposes to do, especially since he’s armed with a mountain of testimony gleaned from public examinations in the Federal Court in Brisbane last year.

Tucker spent five days in the hot seat and acknowledged that his share of profits from MS Asia so far amounted to $3.8 million.

But, in comments that raised more than a few eyebrows, he told the court that he had not received the money and didn’t know where it was being held.

Adding to the intrigue is the fact that solicitor Stephen Russell is representing Pleash and Equititrust in the matter.

It’s understood that there’s not a whole lot of love lost between Russell and Tucker, who is now listed as just a consultant at the firm he co-founded in 1998.