great southern planners face lawsuit

http://business.smh.com.au/business/great-southern-planners-face-lawsuit-20090720-dqsq.html

FINANCIAL planners who advised their clients to invest in the collapsed timber project Great Southern are being examined as potential targets of a class action.

A Slater & Gordon associate, Ben Whitwell, confirmed yesterday the firm was considering whether it should launch a court challenge against planners under section 945A of the Corporations Act, alleging planners had an inappropriate basis for the advice.

Mr Whitwell said the firm was still assessing as targets for litigation the Great Southern directors, auditors and legal professionals who approved product disclosure statements.

Mr Whitwell is in charge of the class action that Slater & Gordon launched against the Brisbane financial planner Professional Investment Services in relation to Westpoint. Mr Whitwell said the case, for which PIS made a $17 million provision in its 2006-07 accounts, was proceeding.

PIS is believed to have recommended Great Southern to a large number of its clients, after forging a close relationship with many agribusiness schemes.

Mr Whitwell said he hoped Slater & Gordon would be deciding on a course of action before the second meeting of creditors scheduled for September.

He also encouraged investors to register their interest in a possible Great Southern class action.

"From the numbers I have seen a lot of people have borrowed to invest," Mr Whitwell said yesterday.

"I think a lot of people are very concerned about losing their homes."

PIS remained unavailable to answer questions regarding its exposure to Great Southern and Timbercorp.