CBL Insurance IPO

[Brain]

Two important differences between the two actions is that with IMF you are signing up to the legal action whereas with
LPF you are just registering your interest.

I can not get my head around how two separate actions can be taken. Surely one of these litigators will have to drop out.

[morphs]

It gets even more confusing. I sent an email to both groups asking if it was an issue to join both actions.

LPF/Meredith Connell responded as follows: "To register for our class action, you will need to opt out of the action being run by IMF Bentham. You have 21 days from the date of registration with IMF Bentham to do this."

IMF Bentham responded as follows: "As the only Respondent in the IMF Funding Agreement is CBL Corporation Limited, clause 7.1.6 will not apply to a class action against CBL’s directors only". (Clause 7.1.6 states that you must opt out of any other proceeding against the respondent).

So, what's a little guy to do?

[Brain]

The NZSA are looking into it and will be commenting hopefully in the near future.

[BlackPeter]

Two important differences between the two actions is that with IMF you are signing up to the legal action whereas with
LPF you are just registering your interest.

I can not get my head around how two separate actions can be taken. Surely one of these litigators will have to drop out.

You are probably right. I assume as well, that if one of the actions drops out the other will be happy to accept late entrants (assuming the legal action is at that stage not already all done and dusted). The more claimants, the larger the fee base. But hey - this is just an uninformed view. Yes, would be good to hear from the NZSA.

Did you contact them?

[Brain]

You are probably right. I assume as well, that if one of the actions drops out the other will be happy to accept late entrants (assuming the legal action is at that stage not already all done and dusted). The more claimants, the larger the fee base. But hey - this is just an uninformed view. Yes, would be good to hear from the NZSA.

Did you contact them?

Yes I did and clearly the NZSA CEO Michael Midgley had already given it some thought.

[BlackPeter]

Does not sound that way.

Got a response to my question from CBL Class Action (funded by the NZ LPF group) and they say shareholders need to choose.

Didn't hear back so far from IMF Bentham, but suppose that their Q and A is already pretty clear on that point.

Given that two major shareholders (Harbours Asset Management and Argo Investments) signed already up to CBL Class Action (LPF) - and given that it is NZ based and funded, this might be the place to go.

People who signed already up with IMF and want to change can do that during the cool down period of the contract (I think 21 days).

Anyway - interested to hear other peoples views ....

Just for completeness - I received today as well an answer from IMF related to my questions. Unfortunately did they mark this email as "private and confidential" (though not quite sure, why?), i.e. not sure how much of the information I am allowed to divulge.

However - according to this email (other than in there Q&A) do they not prohibit clients to sign both agreements, indicate however that it might not be advisable (risk of double payment of fees). Not surprisingly, they think that they are the better alternative, but I think this is what the other action stated about themselves as well.

Didn't really change my mind ... still intend to go with LPF.

[Brain]

If the LPF action is successful and the directors behaved dishonestly will the directors liability insurance company pay out?

[BlackPeter]

I assume you are asking: Is the insurance paying if the directors acted intentionally dishonest (i.e. fraudulent) vs. just being negligent?

Good question. I recon it is not the task of a civil case to determine criminal intent ... and maybe it would not be in shareholders best interest to find out the answer to this question?

But no, I don't know whether liability insurance would pay if the directors are found to have acted fraudulently instead of just having been incompetent.

[BlackPeter]

Chris Lee talks about CBL litigation in his latest (today's) "Taking Stock".

https://www.chrislee.co.nz/taking-stock

You first need to scroll through a rather lengthy discussion on SCF - 8 screenpages (well, on my system).

In a nutshell - he recommends to go with LPF (the New Zealand Litigation Funder) and points to their previous successes with PricewaterhouseCoopers (auditing of the Christchurch property-based borrower David Henderson), Ministry of Primary Industries (allowing a virus-infected pollen to sabotage the kiwifruit industry), Mainzeal directors (incl Jenny Shipley).

He mentions as well that two of these court cases are now under appeal - i.e. whatever it is I think CBL investors should join the fight (nothing to lose), but we should not expect a quick return of (some of) our money ;

[BlackPeter]

Media release from NZSA ...

https://www.nzshareholders.co.nz/pdf...%20release.pdf

They welcome the actions and mention both but make no recommendations regarding which to take ...