Last week, we reported on the contentious back-and-forth between litigation funders LPF Group and IMF Bentham. LPF accused IMF of muddying the waters with a potential shareholder action against failed insurer CBL, whom LPF is already bankrolling an action against. Now, IMF Bentham has formally stepped into the fray, after law firm Glaister Ennor filed a shareholder action which the Aussie-based funder is backing on a no-win, no-fee basis.
As reported in RNZ, Glaister and IMF claim to have a significant number of both retail and institutional investors, who together purchased tens of millions of shares in CBL prior to its February, 2018 collapse. The insurer was worth $750MM on the New Zealand stock exchange when it fell apart.
The Financial Markets Authority and Serious Fraud Office are investigating CBL, and LPF is already funding a shareholder action against the defunct insurer, alleging a breach of continuous disclosure obligations and insider trading by company directors. Upon IMF’s announcement that it was considering its own action, LPF filed a complaint to ASIC stating that potential plaintiffs are likely to be confused by the dual action, which LPF director Phil Newland says is highly irregular.
New Zealand’s class action regime is far less robust than that of neighboring Australia, given the lack of such actions – especially shareholder actions. However such actions are on the rise in New Zealand thanks to litigation funding, so it will be interesting to see how the court handles the competing actions.
