Three former Youpla directors banned from managing companies — The Guardian

The Federal Court of Australia has banned three former directors of the insurance company Youpla Group from managing corporations for periods ranging from five to ten years. The court also ordered them to pay a total of $90,000 after finding that they had breached duties owed to members of the funeral fund.

As The Guardian reports, former Youpla director Jonathan Lowe was ordered to pay the state $50,000 and was disqualified from managing corporations for six years. Michael Wilson was ordered to pay $20,000 and disqualified for ten years, while Geoffrey Clayton was ordered to pay $20,000 and banned from managing corporations for five years.

Court findings

Justice Geoffrey Kennett also ruled that the three defendants must jointly pay $17,000 in the plaintiff’s legal costs. The court found that they had failed to perform their duties with due care and diligence, had not managed conflicts of interest, and had caused harm to ACBF members.

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Youpla Group was previously called the Aboriginal Community Benefit Fund. At the end of the previous month, the company’s founder, Ron Pattenden, was ordered to pay $250,000 and banned from managing corporations for 15 years. He admitted breaching directors’ duties as part of a settlement of a lawsuit with the Australian Securities and Investments Commission. The court also found that former Youpla executive Bryn Jones had breached directors’ duties; the amount of his penalty will be determined at a separate hearing.

Consequences of the fund’s collapse

For decades, Youpla sold funeral insurance policies to Indigenous Australians, including communities with low literacy levels and those where English was not the first language. The company went bankrupt in March 2022, leaving more than 13,000 Aboriginal people unable to pay for funerals. Some families raised money through crowdfunding, while others were forced to leave the bodies of loved ones in morgues until they had collected the required amount.

In September 2023, the Federal Court fined Youpla $1.2 million for misrepresenting the terms of funeral policies. Policyholders were told there would be a lump-sum payment, although reimbursements were provided only for verified expenses. In February 2024, the Australian government announced a $97 million support package for affected families. Payments for those eligible will be processed until December 1, 2026; recipients may choose a funeral bond or a cash payment worth 60% of the policy’s value.