us funders for centro class action

Now this doesn't sound too good.. does this mean they are going to go ahead with this?

http://www.lawfuel.co.nz/releases/release.asp?NewsID=402

US Funders For Centro Class Action

LawFuel - The Law Jobs and Legal NewsWire

Centro investors burned by the collapse of the property manager’s share price have a unique choice of two class actions, with separate counsel and separate litigation funders – a move that could shake up the existing funding arrangements for shareholder class actions in Australia.

The US-based litigation funder Commonwealth Legal Funding, LLC (“CLF”) is to team with law firm Slater & Gordon to represent investors who purchased CNP and CER stapled securities between 7 August 2007 and February 15 this year.

As with existing litigation funders, CLF indemnifies litigants who sign with it from adverse costs and meets any “security for costs” orders.

But a significant CLF advantage is that it takes a lower percentage of the net amount recovered, from 15 to 30 per cent, compared with a top rate of 40 per cent for the other proposed Centro class action.

Slater & Gordon’s James Higgins says Centro investors now have a simple choice.

“The CLF-Slater & Gordon class action offers cheaper participation rates, greater discounts to larger shareholders, and further discounts if certain recovery thresholds are met.”

“This is the first time two major funders have competed like this, and we believe the offer is the most competitive litigation funding agreement offered to date.”

Slater & Gordon began contacting major institutional shareholders yesterday after being authorised by CLF at the weekend to release its litigation funding proposal.

Litigation funding allows a stress-free attempt at recovering investment losses, with little work involved other than signing the funding agreement and providing trading data.

Under Australian law, Slater & Gordon will be paid at court-approved hourly rates for the work it does, and will also recover its expenses if the case is successful. Litigation funders like CLF take a percentage of the net amount recovered, after expenses and legal fees, for advancing all expenses and accepting the risk of any adverse cost award.
For more information
James Higgins, Slater & Gordon (03) 9602 6888
Andrew Taylor (media liaison) 0411 156 797