Furious Firepower investors yesterday launched their long-awaited lawsuit aimed at recovering up to $40 million from businessmen and companies linked to the failed fuel technology company.
The Supreme Court writ, lodged on behalf of 242 Firepower investors late yesterday is the second case brought by litigation funder IMF (Australia) against those allegedly involved with the $100 million fiasco.
Last year, former WA police minister Gordon Hill became IMF's first target when he was sued for $5 million. Mr Hill has since declared bankruptcy, though IMF has continued to pursue his estate.
Yesterday, it started proceedings against former WA Town Planning Appeal Tribunal chief Les Stein and his wife Miriam, the Steins' family company Sattvic, Fremantle lawyers Matthew Morgan and Stefan Alteruthemeyer and their company Maclma, along with the National Australia Bank.
_The West Australian _understands more than $5 million is being sought from the Steins and their company, about $8 million from NAB and up to $26 million from Mr Morgan, Mr Alteruthemeyer and their company.
IMF investment manager Paul Rainford said it had decided against pursuing Firepower chief Tim Johnston or former director Warren Anderson because both were in financial strife and any successful lawsuit would likely see little money being recovered.
But the new case was strong and IMF was building another case against a Singapore company which was involved with Firepower, he said. If IMF decided to launch the third lawsuit, investors could recover up to $60 million across the three lawsuits.
IMF claims in its latest writ that investors poured their money into Mr Morgan's and Mr Alteruthemeyer's trust fund for the purchase of Firepower shares. Money was also paid into Mr Stein's trust fund. But Mr Rainford said the money was allegedly paid out to third parties despite the shares never having been validly issued.
Some of the money which was paid to Sattvic was later used to buy a house by Mr Steins' wife Miriam, IMF said in its writ.
Meanwhile, other funds were paid into a NAB account which should never have been opened, Mr Rainford said.
That money was later paid out to third parties.
Among the plaintiffs in the new lawsuit is a trust linked to former Bayswater mayor Lou Magro, the wife of Channel 7 newsreader Rick Ardon and three current and former WA Newspapers photographers.
The WA jobs market is continuing to weaken, with signs the State’s construction sector is facing tougher days ahead.