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."

Topics:  chcc lehman bros federal court class action




Local Real Estate

finda logo
Featured Real Estate
Looking outside the... $389,000
House 3 2 1
You will be very tempted... Offers Over...
Apartment 3 3 2
Amazing mountain views ... $235,000
Residential Land This home site, located only minutes from town, is simply unheard of ...
Gorgeous eco style home... Offers Over...
4 2 5

Featured Jobs

finda logo

Coffs Coast jobs listed daily


Featured Jobs
SENIOR CIVIL... Brisbane Full Time
Registered & Enrolled... Coffs Harbour Casual


Local Partners

LATEST DEALS AND OFFERS

Job Listings

Search for your next job now.
Learn More

Cars For Sale

Find cars for sale online now.
Learn More

Property Listings

Post an ad from $30
Learn More

Local Profile

Stay Connected

Get the news as it happens, in your inbox

You can change the newsletters you are subscribed to when you edit your profile

Edit Profile


Special Offers

Latest deals and offers

Horoscopes

Libra

Someone has overlooked to repay you some money or a favor. You may be at odds as to how to deal with this. Give it a little more time, then...

read more

Marketplace

Special Offers & Promotions

Compare & Save