Litigation Funders Win In WA

In IMF (Australia) Limited v Meadow Springs Fairway Resort Ltd (In Liquidation) [2009] FCAFC the Court found monies from a settlement were payable to a litigation funder prior to payment to creditors. This is a major coup for litigation funders and should assist in growing their business.

Facts

Meadow Springs Fairway Resort Ltd (Meadow) owned a property at Meadow Springs, Western Australia (property). A number of apartments were to be constructed on the property and then sold to the public, with all proceeds being distributed to Meadow's shareholders (project). Prior to undertaking the project, Meadow obtained a valuation of the property. Relying on the valuation, Meadow's shareholders invested more than $4.5 million into the project. Another $6 million was borrowed from Balanced Securities Limited (Balanced) and Westralian Capital Holdings Pty Ltd (Westralian).