Court gives former business partners the right to pursue $14 million claim against DFO founders

The controversy over troubled shopping centre group DFO continues, after a Victorian Supreme Court justice on Tuesday decided business partners of the company's two former owners David Goldberger and David Wieland could launch a legal case against them. 

The decision comes after months of complicated legal battles and financial tussles over the business, which has resulted in a number of court cases and has even involved the former chairman of the Australian Competition and Consumer Commission, Graeme Samuel.

Supreme Court Justice Jennifer Davies ruled yesterday that the business partners of David Wieland and David Goldberger could launch a legal case against the two millionaires.

The case revolves around a $14 million emergency line of credit used by DFO developer Austexx to construct the company's South Wharf facility.

The two Davids were former directors of Austexx. The case is brought against them by Texxcon, a subsidiary of Melbourne-based construction and engineering firm Contexx.

According to Texxcon, Austexx borrowed $14 million from a joint venture company called Nominexx. That funding was to be used after a separate funding line had been dried up.

However, Texxcon claims this loan was not repaid, and that Austexx has engaged in misleading and deceptive conduct.

While both Davids and DFO manager Geoff Porz were able to stop Nominexx from suing the company – due to their presence on the board – Justice Davies has given Texxcon representatives permission to sue.

Texxcon claims Wieland, Goldberger and Porz breached their directors' duties by saying Austexx could pay back the money, although all three have denied this is the case.

Both Wieland and Goldberger slipped off the BRW Rich 200 list last year after Austexx went close to collapse and was forced to sell assets to reduce a $1 billion debt.

Separately, a property development company called Verticon in which the two Davids were major shareholders was placed in administration last year.

This article originally appeared on SmartCompany.