Federal Court proceedings against former CPL directors and officers

24 August 2012

Trilogy Funds Management Limited as Responsible Entity of the Fund is pursuing a claim against Phil Sullivan, Stephen McCormick, Ian Donaldson and Thomas Swan, former credit committee members and directors of City Pacific Limited, the Fund’s previous Responsible Entity. Class action law firm Maurice Blackburn has been retained to act for Trilogy.

The $60 million claim was filed on 27 April 2012 in the Federal Court in Sydney. It alleges breaches by the former directors and officers of their statutory duties under the Corporations Act 2001. At the centre of the claim are loans provided by City Pacific to borrowing entities Bullish Bear Holdings Pty Ltd (Receiver & Manager Appointed) and Atkinson Gore Agricultural Pty Ltd (Receivers & Managers Appointed) (In Liquidation) between 2006 and 2009, which resulted in substantial losses to the Fund.

Supreme Court proceedings – examinations

The Fund’s investigation into the examinable affairs of City Pacific is progressing well. Phil Sullivan will be further examined in the Supreme Court of NSW (Equity Division) on 5-7 September 2012, together with other individuals (including former officers of City Pacific), in relation to their involvement in the “examinable affairs” of the Fund.

Finance facility and return of capital

We wish to advise that Balmain Trilogy has been in discussions with the Commonwealth Bank of Australia regarding an extension of the Fund’s finance facility, which matures on 31 August 2012.

As part of these discussions, Balmain Trilogy has requested that the facility covenants be extended to enable an immediate return of capital to Unitholders. Until an extension of the Fund’s facility is finalised, no capital payments can be made. We will advise Unitholders as soon as an agreement has been reached.

If you have any questions, please contact the Balmain Trilogy Client Services team on 1800 194 500.