KEY POINTS:
A second multi-party legal case is set to be taken against the now defunct financial advisory group Vestar.
New Plymouth's Dennis King Law has been approached by 16 investors in the Taranaki region and is expecting to file a case on behalf of 20 to 30 investors in
the next few weeks.
The action follows that of 45 Auckland investors who are also in the process of preparing to take action through Auckland lawyer Lawrence Herzog.
Principal Dennis King said the firm and investors had made contact through a meeting for investor advocacy group EUFA and had been working on the case for several months.
It had hired an additional lawyer because of the increase in workload from taking on the case.
King said the firm planned to sue QBE - one of the largest insurance firms in Australia - because there appeared little point in pursuing Vestar itself as it had since gone into liquidation. "Vestar had an insurance policy for claims of this manner so it seems to us a logical means to pursue."
King said he planned to file the case within weeks although he expected it could take years before there was an outcome.
The investors were mainly from the Taranaki region and had in total lost or had between $1 million and $2 million tied up in investments through the financial advisory group.
"They are mostly retired people. They have invested their life savings in accordance with what they thought was good professional advice and have found - to their shock - it was not as good as what they thought it might have been."
King said he had had contact with the Auckland group but investors wanted to keep it local by taking their own case. The firm is also representing a couple who have already filed their case with the High Court at New Plymouth.
Meanwhile the number in the Auckland group is expected to extend well beyond the initial 45.
Many Vestar investors have found their money was tied up in the same six finance companies: Bridgecorp, Capital + Merchant, OPI Pacific Finance, MFS Boston Finance, St Laurence and Property Finance.
All barring Property Finance are either in receivership or have frozen investments in a moratorium. Two of the finance companies were owned by Octaviar - the same company which also owned Vestar.
The assets of Vestar were sold by Octaviar to Christchurch company Gould Wealth Management in June. Vestar was renamed FP North in July and put into liquidation on August 19.
