Rusty ruling for surfwear shareholder

 

A former legal adviser and investor in international surfwear giant Rusty has had a $2.7 million lawsuit against the company thrown out of Federal court.

Philip George Clifford first filed the suit against the main shareholders and chief executive of Vegas Enterprises, the Perth-based holding company and manufacturer of the Rusty brand, last year.

Clifford accused Vegas directors Rod Hart and Geoffrey Backshall of deceiving him about the financial health of the company when he was invited to become a substantial holder in December 2006.

Clifford acquired 600,160 newly issued shares in Vegas for $2.4 million and a further 41,229 shares from an existing shareholder for $170,000. He alleged Hart and Backshall misrepresented Vegas’ bank debts, sales and product at the time, with the shares now unsellable.

However in a 113-page judgement late last month, Federal Justice Michael Barker dismissed Clifford’s claim and ordered him to pay his opponents’ legal costs.

Justice Barker said he did not believe bank debt and product representations by Hart and Backshall had been misleading or deceptive, nor the sales projections provided to Clifford in late 2006. He dismissed allegations that Clifford’s share acquisition funds were used to pay down the overdraft facility and shareholders’ loan accounts.

Clifford has yet to confirm whether he will appeal the decision.

Assia Benmedjdoub