Lismore expects a Lehmans windfall
LISMORE City Council is expecting good news from its class action against the liquidators of Lehman Brothers Australia, with the final ruling due next month.
The council had already written off $2.7 million in losses from collaterized debt obligations (CDOs) made before the GFC with Lehman's Australian subsidiary, but the class action would return some of that, the council's finance manager Rino Santin said.
At last night's council briefing, a representative from the council's investment consultants CPG Research and Advisory, managing director Andrew Vallner, was also upbeat about several CDOs still invested.
On their current value, the CDOs were expected to hand back about $970,000 of the $2.7 million the council had previously been forced to write off after the collapse of Lehman Brothers in the US.
That will come on top of the return from the class action ruling and help patch up the losses on the council's investment portfolio.
However, a significant proportion of the class action award is expected to go towards legal fees payable to class action litigator IMF.
Mr Santin has previously said he expected the council would ultimately claw back about $1.4 million from the $2.7 million loss.