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Settlement vindicates Bankwest move: CBA

Settlement vindicates Bankwest move: CBA
The Australian FRIDAY’S settlement of a long dispute with property developer Rory O’Brien is further vindication of the Commonwealth Bank’s handling of Bankwest customers following the controversial acquisition of the Perth-based lender in 2008, the bank says.

A joint statement by CBA and Mr O’Brien, released after the settlement, noted Mr O’Brien had alleged that CBA had inappropriately foreclosed on his $282 million Whisper Bay development at Airlie Beach in Queensland to derive a benefit under the Bankwest purchase agreement.

It said that Mr O’Brien, after viewing the evidence CBA intended for the trial, had agreed to withdraw the “improper purpose” or “clawback” claims, recognising they were without foundation.

“Mr O’Brien accepted there was no evidence that CBA’s or Bankwest’s officers had actually acted in the way alleged by Mr O’Brien in the improper purpose or clawback allegations,” the statement said.

Since the $2.1 billion acquisition of Bankwest, CBA has been dogged by claims from a group of commercial customers that the bank “manufactured” defaults so it could lower the purchase price under clawback arrangements with the seller, HBOS.

The claims were aired in a 2012 Senate inquiry, and have been unsuccessfully raised in a number of court actions.

In Mr O’Brien’s case, CBA was chasing him for $160m under personal guarantees, with the developer launching a $512m cross-claim that alleged unconscionable conduct by the bank in terminating his loan.

The case has been running for four years, but was settled on Friday ahead of a full hearing in the NSW Supreme Court that was scheduled to start today. Under the settlement, all proceedings between CBA and Mr O’Brien have been finalised.

Author : Richard Gluyas
Source : The Australian


Last modified onTuesday, 06 May 2014 05:18

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