Unit holders’ $20m win as Palmer takes control of resort

 

Hundreds of retirees who own timeshares in mining magnate Clive Palmer's mothballed Coolum Resort on the Sunshine Coast have had a legal win and are set to receive a slice of $20 million in a settlement reached today in the Federal Court in Brisbane.

The settlement of the class action also brings to an end up to eight other related cases in both the Federal Court and the Queensland Supreme Court.

The settlement is expected to give Mr Palmer control of the entire resort and also means that two related cases in the Supreme Court will also end.

While the epic dispute has been running, Mr Palmer built a theme park with 160 replica dinosaurs just metres from the resort villas.

The battle was triggered after Mr Palmer bought a large number of the shares in a company called The Presidents Club Limited in 2011.

It relates to Mr Palmer's 2012 takeover offer of The Presidents Club to buy out the remainder of the shares he did not already own, offering to buy all their interests for $55,000 for each quarter share.

The Presidents Club was structured so that each quarter share entitled the owner to a strata-title unit together with shares in a company.

 

Clive Palmer on the Gold Coast recently. Picture: Russell Shakespeare
Clive Palmer on the Gold Coast recently. Picture: Russell Shakespeare

 

The shareholders are mostly elderly golfing enthusiasts, mainly from Melbourne, who bought in the late 1980s and early 1990s when the resort was the Hyatt Coolum resort, which hosted the PGA golf.

As part of the settlement reached today, Mr Palmer has agreed to pay 310 unit holders $65,000 each for their quarter shares.

This will give Mr Palmer control of the entire resort, which is what Mr Palmer has been aiming to achieve for nearly a decade.

Justice Andrew Greenwood today ordered Mr Palmer pay the $20,804,160 into the court and for notices be sent out to all shareholders, informing them that everyone including the non-class members whereby unless they opt out, they will each be paid $65,000.

The class action was taken by just 260 of the 310 unit holders, but the benefit will be received by all of them.

The unit holders in the class action had been seeking to be paid a total of about $120,000 from Mr Palmer - made up of $65,000 for their units plus interest dating back to 2012 when Mr Palmer made the initial offer, and payment of all of the strata levies they have paid on their holiday units since that time.

 

Palmer Coolum Resort on the Sunshine Coast
Palmer Coolum Resort on the Sunshine Coast

 

The unit holders were trying to fund their class action by issuing a levy to The Presidents Club shareholders, but this failed when Mr Palmer succeeded in getting an injunction against them.

The resort was closed for refurbishment in 2015, putting staff out of work and leaving the shareholders of the resort's villas in limbo.

Speaking outside court after the orders were made, Sydney barrister Robert Newlinds SC, who was representing the unit holders, said he was really satisfied with the outcome.

"This group of clients have stuck together through a very difficult process, and the result is a credit to them for holding their ground," Mr Newlinds said.

Villa owner and class action lead plaintiff, retired lawyer, Ian Lewis, 74, from Melbourne told The Courier Mail: "The owners will be very happy to no longer have to pay the costs of owning a villa in a non-operating resort."

Mr Palmer is facing criminal charges brought by the corporate regulator ASIC arising out of the same failed takeover of The Presidents Club in 2012.

It is not known whether yesterday's settlement will affect ASIC's attitude to pursuing those charges. Mr Palmer has previously denied any wrongdoing.

Mr Palmer's solicitor Sam Iskander from Alexander Law has not returned calls seeking comment.

 

Originally published as Unit holders' $20m win as Palmer takes control of resort



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