IOOF expects to reappeal timber case

IOOF is considering  "all available legal options" for former business Australian Executor Trustees, which exposed it to millions in compensation costs after last Thursday's court judgement in the S.E.A.S Sapfor Forests Pty Ltd case.

The company notified investors of the potential financial impact in company filings on Friday.

"IOOF is currently considering this with its insurers. The maximum exposure to IOOF, net of insurance proceeds, is approximately $16.5 million," it said.

"IOOF is considering all available legal options and expects to appeal this judgment."

Australian Executor Trustees (SA) Limited was appointed as the trustee of the S.E.A.S Sapfor Forests Pty Ltd in 1965. The scheme was to invest in timber on behalf of "covenantholders" but they eventually copped losses.

One of the convenantholders, David Kerr backed by litigation funder IMF Bentham demanded that AET pay compensation of over $82 million on behalf of the investors.

On Thursday, the Supreme Court of New South Wales said he was entitled to receive equitable compensation from AET in the amounts sought by him ($82.46 million) minus the receiver costs of about $1.6 million.

IOOF sold its AET corporate trust business for $51.6 million to Sargon last year.

Liability for any outcome from this case was retained by IOOF.

"Sargon acquired AET from IOOF in November 2018. However, as this matter pre-dates the acquisition, IOOF indemnified Sargon," a Sargon spokesperson told Financial Standard on Thursday.

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