Welter Of Cross-claims In Damages Suit Over Hih
The Age
Tuesday February 19, 2008
THE large damages suit over HIH Insurance's 1998 purchase of FAI Insurances will involve at least 14 cross-claims by FAI's financial adviser, Goldman Sachs Australia, its reinsurer, General Reinsurance Australia, and former FAI executives Rodney Adler, Daniel Wilkie and Tim Mainprize.
The case, which also names former GSA chairman and now Liberal shadow treasurer Malcolm Turnbull as a defendant, is expected to come to trial in the NSW Supreme Court next year. The original plaintiff, HIH liquidator Tony McGrath, is trying to recover the $295 million HIH paid, plus almost as much again in interest. The case centres on Mr McGrath's allegation that FAI's true financial position was concealed when HIH bought it.The failure of the combined group in 2001, leaving insurance policyholders $5 billion out of pocket, is Australia's largest corporate collapse. In November, Justice Patricia Bergin gave the defendants until this month to lodge cross-claims. Mr Adler, Mr Wilkie and Mr Mainprize have filed against Goldman Sachs, Mr Turnbull and his former colleague Russel Pillemer. In turn, the investment bank has claimed against Gen Re, which sold a reinsurance contract alleged to have disguised FAI's capacity to meet claims.
© 2008 The Age
Share This