Wingecarribee Shire Mayor and Chair of Council’s Finance Committee, Councillor Juliet Arkwright has today welcomed news that liquidators on behalf of Lehman Brothers Australia had finally agreed to settle all matters stemming from the successful class action litigation led by Wingecarribee Shire Council against collapsed investors, Lehman Brothers Australia (LBA), seeking damages for the failed collaterised debt obligations (CDO’s) investments.
The settlement places Council, and a further 68 organisations nation-wide, a step closer to recouping a combined $180 million in damages lost on CDO investments that were marketed to councils and not for profit organisations by LBA.
“This announcement is an extremely positive outcome for Council,” Councillor Arkwright said. “It effectively puts in place an agreed way forward for Council to receive a significant distribution of monies from Lehman Brothers Australia.”
The news comes on the back of Council recovering all its capital on the Dante Series of CDO’s, totaling almost $7 million at the start of the year after participating in separate legal action in both the UK and USA. The Settlement Agreement reached on Friday has been achieved only after the Federal Court of Australia ruled in favour of Wingecarribee Shire Council and the other claimants in 2012, with Justice Rares finding that Lehman Brothers Australia had acted in a deceptive and misleading manner in its dealings with Council.
“As Chair of Council’s Finance Committee, it also vindicates both mine and the Committee’s position to join the IMF funded class action, which led the legal action to recover funds lost as a result of Lehman Brothers Australia’s marketing of toxic CDO investments.”
Final settlement is conditional on the Federal Court approving separate applications from both the claimants and LBA, which are expected to be heard in the Federal Court later this month.
It is anticipated that the applications to the Court will be successful, opening the way for the distribution of monies to Council and other creditors, with distribution of funds expected to commence from April next year.