4 March 2010
A LITIGATION specialist is
hosting public meetings with former Storm Financial investors this week to urge
them not to accept the Commonwealth Bank's current $200 million-plus settlement
deal, claiming that they are legally entitled to much more.
Stewart Levitt -- whose
law firm Levitt Robinson represents about 100 Storm clients -- said the deals
brokered by rival firm Slater & Gordon were at the very bottom of the
compensation calculations that could be awarded in a court of law.
He said if the CBA was not
willing to negotiate better deals, Levitt Robinson would proceed with court
action.
``I am talking about
respecting principals for the calculation of damages based upon the fact the
bank was engaged in what we would suggest was an arrangement that flawed the
whole process from the beginning,'' Mr Levitt. ``It involved imprudent lending,
effectively churning people's investment in a product knowing full well they
were getting in over their head.''
As part of the out-of-court
settlement brokered by Slater & Gordon, which represents about 2000 Storm
clients, the bank has offered to give back the money Storm investors lost when
it sold down their margin loans without their knowledge.
It has agreed to return 90
per cent of the equity, plus interest, that Storm investors held in their
margin loan portfolios when they first went into margin call around October
2008.
However, Mr Levitt
believes this is not enough, as clients have missed out on the growth their
portfolios would have achieved if the shares were never sold.
Levitt Robinson is holding
information meetings this week in Mackay and Brisbane to address the CBA deal
and discuss possible alternatives.
The Townsville-based Storm
collapsed just over a year ago with debts of about $80 million.
