Law firm Glaister Ennor and Australian litigation funder IMF Bentham applied to the High Court on Monday to start a class action against CBL Corp on behalf of Basil Ian Livingstone and others.
That puts the suit on a collision course with another funded by local litigation funder LPF Group and backed by CBL's major institutional shareholders Harbour Asset Management, Australia-based Argo Investments and broking firm Forsyth Barr.
A crucial difference is that the LPF-backed suit is against both CBL and its directors while the IMF-backed claim is tackling solely the company, which is in liquidation, and whoever its insurer is, in the belief that that is the easiest way to claim money for out-of-pocket investors. The IMF-backed claim has been filed at the High Court in Auckland.
As the LPF-backed claim has said, CBL directors received nearly $60 million from selling shares, and likely have insurance themselves, in addition to any cover CBL itself held.
The LPF-backed suit filed a statement of claim in the High Court in Wellington on October 31 and LPF director Phil Newland has said the courts are unlikely to allow both to proceed.