IMF Bentham Funding Class Action Against CBL

IMF Bentham is funding a shareholder class action against New Zealand-based CBL Corp., claiming the company failed to disclose that the Reserve Bank of New Zealand had been investigating its solvency for several years. CBL has since entered liquidation, leaving many shareholders out in the cold.

According to ShareChat, law firm Glaister Ennor is leading the action, which has several institutional investors on board already. IMF and Glaister are now seeking retail investors for their claim, the valuation of which will likely run into the tens of millions of dollars.

The case will be opt-in, because New Zealand does now allow for common fund orders the way neighboring Australia does (the country only permitted its very first opt-out claim last month). That means IMF and Glaister have to build a book of claimants, which they claim makes their case more substantiated, as numerous parties have already signed on.

According to the liquidators’ report, CBL owes nearly $200MM to an array of creditors. The company’s assets are locked up in subsidiaries, which are currently under control of liquidators. IMF and Glaister intend to apply for the right to proceed against the liquidated company to the New Zealand Supreme Court, assuming the liquidators don’t consent to move forward with the claim. They are also anticipating that insurance will cover any payout, though they aren’t yet certain who the insurer is, or what the terms of any agreement are.

IMF and Glaister are alleging that CBL violated The Financial Markets Conduct Act 2013. They have thus far only named the company, not individual executives or regulators, though there may be additions at a later date, should further liability be proven.