Bendigo warns again on strategic arrears

More than a dozen additional class actions may soon be filed against Bendigo and Adelaide Bank in connection with loans to investors in managed investment schemes of the failed Great Southern timber group.

Macpherson + Kelly, the law firm behind the action, told The Australian that investors were willing to fund the additional actions, which have been suggested but not filed for more than a year. Only one class action covering some growers has been filed to date and progress in the courts on that claim is slow.

Bendigo yesterday wrote to all investors in Great Southern schemes that ceased repaying their loans, and which in the past the bank has described as "strategic arrears".

The letter, in the name of the bank's managing director, Mike Hirst, questions claims in M+ K marketing material that it is "as confident as can be" of succeeding in the case. The letter points out that investors must fund the cost of the claims themselves with no litigation funder yet associated with the case.

Hirst repeats earlier warnings from the bank to investors that they "put all personal assets at risk, and potentially face bankruptcy", that they may have to repay tax deductions already claimed on the loans and they face listing with credit reporting agencies that list loan defaults.

The letter concludes by stressing the bank's efforts to "preserve and protect grower value" in the Great Southern schemes and that they should not assume their investment is worthless.

Around $180 million in loans to investors in Great Southern schemes out of $460 million in total are in arrears.