Provident investors must wait

INVESTORS owed money by Provident Capital could have to wait longer to commence a class action.

THOUSANDS of investors owed money by collapsed debenture company Provident Capital could have to wait longer to commence a class action after the Federal Court in Sydney heard the receiver, PPB Advisory, had expressed some concerns that the claims would compete with its pursuit of the company’s directors.

The Weekend Australian revealed last week that both Slater & Gordon and Meridian Lawyers were considering taking action against the trustee, Australian ET, and directors of the failed company.

Yesterday Justice Steven Rares said the class actions could “interfere” and “diminish resources”, noting that PPB had been appointed to recover what it could for the investors.

Meridian had indicated it was more likely action would be taken against the trustee, rather than the directors.

But an earlier affidavit prepared for the court by Meridian referred to “potential action against directors”.

Douglas Raftesath, the practice group leader at Meridian, told The Weekend Australian it had never been the lawyers’ intention to cut across anything the receivers were doing in their pursuit of damages from Provident’s directors.

Odette McDonald, a senior associate at Slater & Gordon, said it was unlikely the receivers would be able to fully recover funds lost by debenture holders, and they too would pursue the trustee for the remaining funds.

Concerns were also heard about competing class actions, in particular over the wording of a note to be sent by PPB to debenture holders advising them of the two actions.