The Sydney Morning Herald 28 July 2014:
Liberal Party powerbroker Peter Clarke has admitted giving untrue evidence under oath during a lawsuit that found he and others who controlled $500 million retirement village flop Prime Trust breached their duties, a court has heard.
As Mr Clarke and other directors of the company that ran Prime Trust prepared to face the Federal Court on Monday, it also emerged the Australian Securities and Investments Commission wants the group's founder, Bill Lewski, banned for life from running a company.
In other submissions to the court by directors of Prime Trust's responsible entity, Australian Property Custodian Holdings, Howard-era health minister Michael Wooldridge begged to be spared any penalty because of his ''vast'' and ''profound'' contributions to public life and the company boards on which he has served.
Mr Lewski, who received a $33 million fee at the centre of the Federal Court case, told the court his was ''a serious but not worst-case contravention''.
The Federal Court is to begin hearing arguments on Monday as to what penalties - bans and fines of up to $200,000 - it should impose on Mr Clarke, Dr Wooldridge, Mr Lewski, Mark Butler and Kim Jaques, who were directors of APCH in the lead-up to its collapse in 2010.
In December, Justice Bernard Murphy found that the five businessmen breached their duties as directors of APCH by approving Mr Lewski's $33 million fee, paid in 2007 when Prime Trust listed on the ASX, at the expense of Prime Trust unitholders.
Separately, Mr Lewski, and Prime Trust's lawyers and advisers, face a $100 million lawsuit over a second fee, of $60 million, the trust paid to Mr Lewski for retirement village management rights.
The Sydney Morning Herald 26 July 2014:
It's been a long hard slog for investors trying to recover any of the $500 million they pumped into retirement village empire Prime Trust, which collapsed in October 2010.
Since then, they've watched with helpless anger as Prime Trust founder Bill Lewski walked away from the wreck with $60 million reaped by selling management rights over the villages - rights the investors say should belong to the trust.
They've been able to do nothing about the decision by Lewski to gift that money to his sons, who are involved with an online betting operation in tax haven the Isle of Man. But the intervention of an Adelaide-based litigation funder this week gives investors hope that perhaps they will see some money shaken loose from Lewski and others involved in the debacle.
A $100 million lawsuit over the management fee, brought against Lewski, other directors including former health minister Michael Wooldridge and their lawyers and advisers, was sitting moribund in the Victorian Supreme Court until Tuesday, when LCM Litigation Fund agreed to back the action.
LCM's move comes as the litigation sector is under unprecedented scrutiny, with calls from Attorney-General George Brandis for a crackdown on the industry because of its ''ethical and moral hazards'' and scrutiny from the Productivity Commission, which has simultaneously proposed more regulation of existing funders and allowing law firms effectively to become litigation funders - something that is currently illegal.
In the stoush over the future of litigation funding, investors, lawyers and funders who stand to profit from legal actions that would otherwise be impossible, clash with company management and defendant lawyers who say funding promotes frivolous lawsuits that would otherwise never have seen the inside of a courtroom.
The writ kicking off the Prime Trust lawsuit had been sitting in the Supreme Court registry for a year, gathering dust. It hadn't been served on any of the defendants, which would normally have killed it off. But with the prospect of a backer emerging, the court gave extra time for it to be served.
''There's been no payment to investors for certainly the last four years,'' says Steve O'Reilly, one of the heads of the Prime Trust Action Group, which represents more than 6300 investors. ''It's just horrendous what the cost has been to investors - not just the financial cost but the human cost. They're really angry and upset that firstly there's no remorse and secondly that money is shifting over to the Isle of Man and it's business as usual.''….
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