News

CHCC socks it to Lehman Brothers

New Coffs mayor Denise Knight couldn't have wished for a better start to her tenure than council's class action victory.
New Coffs mayor Denise Knight couldn't have wished for a better start to her tenure than council's class action victory. Rob Wright

COFFS Harbour City Council is one of 52 councils to benefit from the successful Federal Court class action in the wake of the global financial crisis.

Lehman Brothers Australia, formerly known as Grange Securities, was yesterday ordered to compensate the councils and 20 other charitable institutions and church groups who were misled into making high risk investments.

The losses in Australia since 2008 are estimated to exceed $1 billion.

The compensation, expected to be in the hundreds of millions of dollars, will be announced before the end of the year.

From 2007, Coffs Harbour City Council put funds into collateralised debt obligations (CDOs) but the investments turned sour as the economic uncertainty caused by the US and Eurozone crisis spread across the globe.

It's believed Coffs Harbour lost at least $8.8 million.

Documents produced last July showed the council held $4.7 million in CDOs which had mostly defaulted, leaving a residual value of $892,308.

In handing down his judgement, Justice Steven Rares made a scathing assessment of the business practises of Lehman Brothers' Australian arm.

"Grange was conscious that the trust its uninformed council clients placed in it was being used to Grange's advantage," he said.

"For these reasons Grange is liable to compensate the councils for the losses incurred as a result of the investments."



Join the Community.

Get your local news, your way.

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Justice denied for Bowraville families

Protestors are demanding justice for the families of three children murdered at Bowraville in 1991-92.

Victims' families are rallying for double jeopardy reform.

Vandals strike at Dolphin Marine Magic ahead of protest

Vandals have smashed windows and graffitied Dolphin Marine Magic overnight.

Dolphin Marine Magic vandalism attack ahead of a protest

ABS data reveals regional job woes

JOB DROUGHT: New figures from the Australian Bureau of Statistics reveal there are fewer full-time job opportunities in regional NSW.

ABS data reveals fewer than 5000 full-time regional NSW created

Latest deals and offers


PBR Fraser Coast highlights

Professional Bull Riders / PBR , Hervey Bay Seafront Oval - Troy Wilkinson on Unearthed. Photo: Valerie Horton / Fraser Coast Chronicle

Highlights from Rural Weekly PBR Live Series round at Hervey Bay, Queensland on...

Protestor interrupts dolphin show

Protestor campaigns against Dolphin Marine Magic during a recent show.

Blake Lively Film Shot on Gold Coast

Blake Lively in The Shallows.

New trailer for shark thriller The Shallows starring Blake Lively.

Korora property provides the resort lifestyle

Live the resort lifestyle at Korora

Like to live in your own resort?

Renting harder in Coffs than Sydney

HIGH DEMAND: Coffs Harbour rental properties are in higher demand than in Sydney.

Coffs Harbour’s rental vacancy rate at lowest level in eight years

How a sacked real estate agent made $725k in four months

Agent is now under investigation by the industry watchdog