Fifth Information Bulletin for former Storm clients

Letter to all Levitt Robinson CBA Clients

RE:       STORM, CBA RESOLUTION SCHEME AND OTHER MATTERS

I attach a copy of a letter which I have sent to Charles Tilley, the Senior Legal Counsel of the Commonwealth Bank which recognises that the CBA is proposing that there be a new a separate Proposal Framework for Levitt Robinson clients who are registered as participants in the CBA Storm Resolution Scheme.

At 8.57 pm on Wednesday, 21 April 2010 we received an email from the CBA advising us of changes to the Scheme Rules.

Please find attached a copy of my letter to Charles Tilley dated 22 April 2010 and also my summary of the changes to the Scheme Rules which have been notified to us and which we believe that we were substantially responsible for bringing about. 

I also attach a copy of the covering email from Alexandra Chubb of the CBA, which summarises some of those changes.

PRESSURE REDUCED

At clause 4.2, the deadline procedures have become more flexible so that if a period is prescribed for doing something and that period is exceeded, it is now no longer automatic that the Borrower will be deemed to have withdrawn from the Scheme or that the only grounds for an extension being granted would be that the Borrower Lawyer could not contact the Borrower, the Borrower suffered from ill health or the Borrower had a need to obtain further assistance in understanding the implications of participating in the Evaluation or Determination phases of the Scheme. 

The Bank has introduced the option of withdrawing an offer and putting the Borrower to “the end of the queue” to receive a proposal package, if the Borrower has neither accepted nor rejected an offer by a specified deadline.

The Bank may issue Deadline Notice and one of its options still remains to terminate the Borrower’s participation in the Scheme.  Nevertheless, the Bank may still elect to issue a proposal or revised proposal which would serve to reactivate the Borrower’s participation in the Scheme. 

A new Clause 4.5(b) has been introduced which stipulates that “the Bank will not unreasonably refuse an extension request described in this clause 4.5”.

The procedure for making counter-proposals has, at last, been the subject of considerable re-focus by the Bank and amendments have been made to the Rules concerned with the making of counter offers and the Bank’s response. 

It is to be noted that in public speeches, Stewart Levitt had declared his concern at the time (and other) pressure being exerted on Borrowers to accept proposals from the Bank and over Slater & Gordon’s downplaying of the availability of a process for making counter-proposals and entering into negotiations to improve on the Bank’s initial proposal.

Borrowers who have already signed-off on a “deal” with the Bank, believing that they had no alternative but to make a decision within the limited timeframes provided for in the Scheme Rules as they previously stood, and wish that they had been able to receive the benefit of the slightly more flexible approach which has now been adopted by the Bank, may regret having felt forced into making quick decisions on matters of vital importance affecting their own and their family’s future quality of life.

Anyone with concerns in this regard, should feel free to contact Stewart Levitt or Stephanie Carmichael at Levitt Robinson. 

With Compliments,

LEVITT ROBINSON

STEWART A. LEVITT

Principal Solicitor & Advocate