| Mercury Rising |
 |
| Date of Funding: | 1 Jun 2003 |
| Plaintiff: | Unit holders in the film scheme to make the movie "Mercury Rising" |
| Defendant: | Permanent Trustees Australia Ltd & Anor |
| Court: | Supreme Court of Victoria |
| Cause of Action: | IMF funded a number of investors (the "Investors") in a scheme relating to the film "Mercury Rising", against Permanent Trustee Australia Ltd ("Permanent") and Permanent Trustee Company Ltd ("PTC").
The proceedings were filed in the Victorian Supreme Court on 26 June 2003.
In 1997, money paid by Investors was provided to Permanent to be applied primarily for the production of the film. Under the scheme, the investors were to receive at least 101% of the money they had contributed (after a certain period). The obligation to pay this money was secured by letters of credit from various companies. A number of investors borrowed money for the scheme.
It was claimed that Permanent breached it duties as trustee and as agent in:
(a) paying out the monies contributed by investors in a way which breached the Trust Deed;
(b) failing to notify or require the owner to make up the shortfall in the budget for the film;
(c ) paying out the moneys before securities had been provided to Permanent securing the payment of 101% of the money contributed, and before ensuring that the securities were supported by financial arrangements which ensured that if they were called on they would be honoured; and
(d) failing to make sufficient inquiries to satisfy itself that the Manager had observed, and would observe, its obligations.
It was claimed that had the Trustee made sufficient inquiries it would have (among other things) determined that:
(a) certain of the securities were not sufficiently supported so as to be satisfactory to a prudent trustee; and
(b) part of the moneys were being paid over to enable the securities to be provided (ie not for the purposes of production of the film).
The Investors sought damages and also an order that Permanent (and PTC) restore the fund over which it was trustee to the postion it would have been had the breaches not occurred and repay the Investors' money. |
| Result: | The case settled on 21 August 2006, after the trial had begun. IMF received about $3.9M on direct outlays of $2.9M. |
| |
