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16-461MR Directors of LM Investment Management not found to have breached their director's duties
The Federal Court has today found that Peter Charles Drake, Francene Maree Mulder and Eghard van der Hoven did not breach their duties as directors of LM Investment Management Ltd (LMIM).
ASIC had alleged that Mr Drake used his position to gain an advantage for himself and that each of the former directors of LMIM breached their director’s duties by failing to act with the proper degree of care and diligence regarding transactions involving the LM Managed Performance Fund (MPF), an unregistered managed investment scheme with about 4,500 investors.
The MPF loaned funds to Maddison Estate Pty Ltd, to complete a property development on the Gold Coast known as ‘Maddison Estate’. ASIC's case focused on a decision of the directors to extend the loan in 2012.
ASIC is reviewing the Court's decision and has no further comment at this time.
LMIM was the responsible entity for seven registered managed investment schemes as well as the trustee for MPF. More than $400 million was invested in MPF. In total, LMIM was responsible for managing at least $800 million on behalf of approximately 12,000 investors in Australia and overseas.
ASIC's claim against Simon Ticker and Lisa Darcy was dismissed by consent on 12 September 2016 (refer MR16-321).
Investors and unit holders affected by the collapse of LMIM should check our dedicated LMIM webpage for further information.