IAM to Pay $1.9 Million to Resolve BGC Dispute Involving Senior Staff
Income Asset Management has resolved a protracted legal dispute with BGC involving former employees, agreeing to a $1.9 million settlement. A key shareholder has stepped in with a liquidity facility to support the company’s payment obligations.
- Settlement of long-running litigation with BGC for $1.9 million
- Dispute involved five senior IAM staff formerly employed by BGC
- Settlement reached without admission of liability
- Substantial shareholder Jim Simpson offers unsecured liquidity facility
- IAM continues insurance discussions related to historic claims
Background to the Litigation
Income Asset Management Group Limited (ASX – IAM) has announced the resolution of a legal dispute dating back to 2020 involving five of its senior employees who were previously employed by BGC. The litigation, which saw IAM joined as a party in 2024, centred on claims related to the engagement of these staff members. Throughout the proceedings, IAM and its employees have consistently denied any wrongdoing.
Terms and Implications of the Settlement
The company has agreed to a mediated commercial settlement requiring a payment of A$1.9 million by the end of April 2026. Importantly, this settlement is made without any admission of liability, reflecting IAM’s strategic decision to avoid the ongoing costs, distractions, and uncertainties that prolonged litigation would entail. While the full terms remain confidential, the settlement effectively closes this chapter of legal challenges for the company.
Management Stability and Future Outlook
The five employees at the centre of the dispute are senior members of IAM’s management team and have been instrumental in building the company’s current franchise. Their continued leadership is seen as critical to the company’s future growth and stability. IAM’s board and management have expressed relief at putting the matter behind them, allowing the company to focus on its core business of income investment management.
Liquidity Support from a Key Shareholder
To ensure the company can meet its settlement payment obligations without strain, substantial shareholder and director Jim Simpson has offered an unsecured liquidity facility. This facility is specifically earmarked for the settlement payment and will only be drawn upon if necessary, with the board preferring to use existing company funds. This gesture provides additional financial certainty and underscores shareholder confidence in IAM’s ongoing operations.
Ongoing Insurance Discussions
IAM has also notified its insurer regarding the settlement and is actively engaging with the insurer on claims related to this matter as well as separate historic fraudulent activity previously disclosed. The outcomes of these insurance claims remain pending, representing an area to watch for potential financial impact in the future.
Bottom Line?
With litigation behind it and shareholder support in place, IAM looks to stabilise and refocus on growth, though insurance claim outcomes remain a key watchpoint.
Questions in the middle?
- Will IAM’s insurer cover any portion of the $1.9 million settlement?
- Could the historic fraudulent activity claims lead to further financial liabilities?
- How will this settlement impact IAM’s reputation and client confidence long term?
