AMS Holdings - Case Update

The Federal Court has approved a litigation funding agreement proposed by the special purpose liquidators of AMS Holdings to allow them to investigate and pursue potential claims against Westpac.

In December 2020, the Court made orders appointing Robert Kirman and Robert Brauer of McGrathNicol as both receivers/managers and liquidators of an unregistered managed investments scheme and the operators of the scheme, AMS Holdings and Chris Marco. Mr Marco has since been charged with allegedly defrauding nine investors out of $36.5 million. The trial is scheduled to commence in late July.

In September 2024, on interlocutory application made by Napoli Corporate Pty Ltd, the Court appointed Jason Stone and Glenn Franklin of PKF Melbourne as special purpose receivers/managers and special purpose liquidators to investigate and potentially pursue claims against Westpac Banking Corporation and others in relation to alleged involvement in misappropriations of scheme property and breaches of trust or fiduciary duty by the operators of the scheme (Mr Marco and AMS Holdings).

Approval had also been sought for the special purpose liquidators to enter into a funding agreement with CHC IF III, a subsidiary of Court House Capital. The Court indicated that, while it was satisfied that approval of the funding agreement should be given, it was not prepared to make the orders sought because of the informal communication the Court had received from Napoli’s newly-appointed solicitors after the Court had reserved its decision on the matter. The solicitors had emailed the Court a new version of the funding agreement and a different version of the lawyers’ costs agreement. This was done without an application to re-open the hearing or to amend the terms of the approval application.

However, subject to addressing matters of formality and notice to interested parties, the Court indicated that it was prepared to deal with the funding agreement approval application on the papers without a further oral hearing.

Now, the Court has approved the funding agreement, finding that the amendments to the agreement were largely cosmetic in nature and essentially reflected the change in legal representatives, while others were improvements in the clarity of the agreement. As a result, the Court was satisfied the agreement should be approved.

Read the decision here.