Tens of thousands of grower investors in failed managed investment scheme operators, Timbercorp and Great Southern, face making no returns while still saddled with debt and loan repayments.
According to The Australian Financial Review, more than 61,000 grower investors have ploughed nearly $3 billion into both companies' schemes, which account for nearly half of the country's MIS sales.
Dominic Alafaci, Collins House managing director and financial planner, said his firm was taking up many distressed clients following the collapse of the two biggest MIS businesses.
While Mr Alafaci said he did not recommend Timbercorp or Great Southern, he noted that many of the loans were full recourse, which meant the lender could come after the borrower for any excess amount of money owed.
"From the cases I have seen most of these loans were non-limited recourse, which means the client is in a position of weakness," he said.
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