Vestar litigants face long wait for hearing

More than 150 investors pursuing legal action against the former directors and investment committee of failed financial advisory group Vestar are likely to have to wait until next year before the case is heard.

Auckland lawyer Lawrence Herzog, who is representing the investors, said a hearing would probably not be held until next year due to the amount of work needed to prepare for it.

Herzog filed the case in May and a timetable of proceedings was set at a conference held at the end of July.

The case is being taken against former Vestar directors Kelvin Syms, Simon Purvis, Kenneth Swain and Andre Gaylard and current director Jason Maywald as well as the former investment committee members, who include Syms, Purvis and Commerce Commission board member Donal Curtin.

Last year Curtin faced an investigation by the commission over his level of disclosure in regards to involvement in other companies after investors complained about his promotion to the role of chairman.

He was cleared but he decided not to step up into the role although he remains a commissioner.

Herzog said the defendants had all been served with the proceedings and statements of defence had been filed with the court. A further meeting would be held in December.

Although more than 150 people have put money up for the case to be taken, Herzog said he would focus on one couple and use their situation as a test case. He said many investors faced similar circumstances, having invested thousands of dollars through Vestar only to have them lost or locked up in finance companies.

The claim would be based on alleged negligence, breach of fiduciary duty and breach of the Fair Trading Act.

A spokesman for the Victims of Vestar group, which was formed in March last year after investor advocacy group EUFA toured the country speaking to investors, said many were resigned to the fact it could take years to go through the court.

"It would be really nice to have a quick resolution and have it all behind us. But the main thing is to have these guys face the music," Herzog said.

Meanwhile, a second group in New Plymouth is also close to filing its case.

Dennis King lawyer Karen Towt said she expected to go ahead with a multi-party case representing 13 to 14 Vestar investors in the next fortnight.

That case was also being taken against the former directors and investment committee.

Towt previously tried to take a case against Vestar insurers QBE but it failed to get to the hearing stage.