Timbercorp investors warned not to take settlement offer

MORE than 14,000 investors in the failed Timbercorp managed investment scheme have been warned not to accept a settlement offer from liquidators.  

Slater and Gordon litigation lawyer James Naughton has warned Timbercorp Finance borrowers they could relinquish their legal rights by accepting the offer.  

As many as 14,500 investors borrowed more than $470 million from Timbercorp Finance to invest in Timbercorp before the investment scheme collapsed and was put in liquidation in 2009.  

A class action taken against the company by investors last year was dismissed by the Victorian Supreme Court, with many still trying to recoup their losses.  

The liquidators have since offered borrowers a 15% discount if they repaid their loans upfront, but Mr Naughton warned against taking the deal.  

"The opportunity to settle debt at a discount may sound attractive, but Timbercorp Finance borrowers should investigate whether accepting this offer will prevent them from pursuing further legal action," he said.  

He said many investors took out the loans on advice from financial planners in an effort to minimise their tax liabilities. "For their efforts, financial planners and accountants were rewarded with attractive commissions," he said.  

"Investors, on the other hand, have literally watched their investments go up in smoke and have been left with large debt that just keeps growing as interest continues to accumulate."  

Slater and Gordon, which was not involved in last year's class action, said the current offer expired at the end of this month, but advised borrowers to seek independent legal advice.  

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