Ross claw back appeals dismissed, pool shrinks
Today's decision shrinks the total value of possible claims from about $80 million to $32.9 million.
The Court of Appeal has dismissed appeals in the first Ross Asset Management clawback test case, meaning Wellington lawyer Hamish McIntosh can keep his initial $500,000 investment.
But he will have to pay back $454,000 of “fictitious profits,” in a decision which has major ramifications for the nearly $80 million of possible clawback claims liquidators have identified.
Last year, a High Court judge ruled Mr McIntosh could keep his initial investment but had to pay back his “fictitious profits.”
Both he and liquidators PwC appealed the decision in November, which delayed attempts to claw back about $3.8 million in the first three test cases.
The Court of Appeal released its judgment today, in which Justices Christine French and Rhys Harrison have dismissed both parties’ appeals.
Justice Forrest Miller dissented, and would have allowed the liquidator’s appeal while dismissing McIntosh’s, which would have seen him have to pay back the full $954,000.
Last month, NBR reported liquidators had identified total possible clawback claims worth nearly $80 million, a significant possible return on the Ponzi scheme which has left more than 700 investors owed about $115 million.
Today’s decision, however, shrinks the total value of the claims to $32.9 million, against 243 investors.
PwC had written to more than 30 other investors it believes it may have claims against, asking for them to enter “standstill agreements” – effectively pausing any litigation but ensuring it does not become time-barred – until the appeal decision is released.
So far, legal proceedings have been started against five investors, while 28 have entered into standstill agreements.
Responses from another 12 were still awaited last month, PwC said.
So far, about $3 million has been recovered in the Ross collapse.
Read the decision here.
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Hamish McNicol
Wed, 16 Mar 2016
Wed, 16 Mar 2016
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Ross claw back appeals dismissed, pool shrinks
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