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Author Topic: "Goldman Sachs Australia was a defendant ..." General Re.  (Read 927 times)
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« on: March 24, 2010, 08:59:03 PM »

McGrath settles $450m HIH claim over FAI Insurance

HIH Liquidator Tony McGrath has finally settled his $450 million claim against FAI Insurance's financial advisers and reinsurers, originally lodged in 2004, for an undisclosed sum.

The settlement had been held up by the intermittent refusal of one of 200 former partners in auditor Andersen, which had been brought in as the subject of a cross claim by the defendants, to sign the settlement.

Justice Patricia Bergin of the New South Wales Supreme Court ratified the decision by all parties that they would make a financial settlement in favour of the liquidator and then all parties would drop claims against each other, in what was threatening to become an extremely long drawn out case.

The main defendants were Berkshire Hathaway subsidiary General Re, which provided one policy, US-owned reinsurance broker Guy Carpenter, which provided another, and Wall Street investment bank Goldman Sachs.

Goldman’s local subsidiary Goldman Sachs Australia was a defendant, as was its then chairman Malcolm Turnbull, because it had been takeover adviser to FAI.

Goldman’s advice to sell FAI shareholders was clearly correct but there was a strong contention in the original statement of claim that the FAI takeover defence documents, prepared by Goldman Sachs Australia, should have informed shareholders that the New York investment bank had in 1998 considered putting some of its own money into FAI, but had decided not to do so.

Why didn't Goldman inform shareholders?

more here - http://www.theaustralian.com.au/business/mcgrath-settles-450m-hih-claim-against-fai-insurances-advisers-reinsurers/story-e6frg8zx-1225844691087

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