IOOF subsidiary loses appeal

The Court of Appeal dismissed Australian Executor Trustees’ (AET) appeal against the decision made by the Supreme Court of NSW on 26 September 2019 and ordered AET to pay the respondents’ costs of the appeal. Courts ruled in favour of a group of retirees who lost investments in a forestry scheme the company ran in the 1980s, with the covenant holders expected to be awarded around $80 million compensation plus costs.

The failed appeal could see IOOF pay $16.5 million, net of insurance proceeds, including interest and excluding costs. AET’s corporate trust business was sold to Sargon Capital for $51 million in 2018 but the agreement indemnified Sargon for any liability relating to legal action.

Correction: An earlier version of this article identified AET as a former subsidiary of IOOF.