$82.5m settlement made between Macquarie Bank and investors
A FEDERAL court justice has sanctioned an $82.5 million settlement between Macquarie Bank and investors who took out margin loans to buy indexed funds in Storm Financial.
About 1050 investors will share the money but those who contributed more to the legal funding for the class action will get a bigger slice of the pie.
The people who funded the action will get about 42% return of their equity contribution while others will get about 17.6% return.
Justice John Logan ruled the settlement, which came after complex negotiations and lengthy mediation, was "fair and reasonable" when he ruled in Brisbane on Friday afternoon.
He said another judge had reserved his judgment in a trial between the two parties before mediation took place.
But Justice Logan said there was no doubt there would have been an appeal no matter which way the judge ruled, with a likely prospect it would end up in the High Court.
Justice Logan said if appeals did occur, there would not be a likely conclusion for the case until 2016.
Referring to an Australian idiom used during submissions to him the day before, he said there was a view "a bird in the hand was worth two in the bush".
Justice Logan said if the bird was a sparrow and the prospect was a plump quail, "then one might be prepared to see what will emerge from the bush".
But he said if nothing emerged at all, then in hindsight people would have wished they had taken the sparrow.
Justice Logan made these analogies when the settlement was fair and reasonable to the Storm investors who were already concerned they had thrown good money after bad.
He also allowed Macquarie Bank the indemnity it sought to stop investors double claiming against it other proceedings, after considering the agreement's fairness towards it too.
Justice Logan said there was "no admission of liability on the part of Macquarie" in making the settlement.