A group of Great Southern investors who funded their exposure to managed investment schemes through Bendigo and Adelaide Bank is getting legal advice on whether it can stop making loan repayments.
The Australian Financial Review reports that any move by the investors to bunker down into a legal fight would create difficulties for Bendigo - which has lent $615 million to about 8500 investors.
The Australian Financial Review also understands that Mulcahy Mendelson & Round is acting for the investor group and is focusing on whether the loans can be declared unenforceable because of potential Corporations Act breaches by Great Southern.
Early investigations into Great Southern suggest the company did not keep investors fully informed of the likely returns on their investments. An expected shortfall of returns from its first forestry project was kept from investors for several months during 2005.
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