Litigation funder LPF Group is funding a shareholder class action against the now-defunct insurance company CBL Corp., as well as its former directors. LPF has complained to ASIC, an Australian regulator, about rival funder IMF Bentham’s proposed action, which may end up targeting only CBL and not the former directors.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Litigation funder LPF Group is funding a shareholder class action against the now-defunct insurance company CBL Corp., as well as its former directors. LPF has complained to ASIC, an Australian regulator, about rival funder IMF Bentham’s proposed action, which may end up targeting only CBL and not the former directors.
As reported in the NZ Herald, IMF is set to go forward with its shareholder action against CBL with or without the liquidator’s consent. According to Gavin Beardsell, investment manager at IMF Bentham, the funder believes there is enough insurance to cover any legal settlement or award, this despite not yet knowing who CBLs insurer is.
For that reason, Beardsell says it is unnecessary to sue the directors of CBL. Yet LPF has 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.
IMF has accused LPF of weaponizing its complaint, by taking it to the Aussie regulator. Class actions – especially shareholder claims – are extremely rare in New Zealand, with only one having made it to court thus far.
