Maurice Blackburn Lawyers secured a major victory for Centro shareholders today, with the $200 million settlement being formally approved in the Federal Court.
Class Actions Principal at Maurice Blackburn, Martin Hyde, said the settlement was strongly endorsed by the court, and was a significant win for the shareholders involved in the class action.
"Our clients range from individuals through to the country's largest financial institutions and today we can give them confirmation that the Court has approved the record settlement," Mr Hyde said.
"This is the biggest class action settlement in Australian legal history, and it will be very satisfying to tell our clients, some of whom lost their life savings on Centro, that they will now see money returned to their accounts."
In handing down his reasons for judgement, Justice Middleton said he considered and agreed with independent legal opinions that the settlement was fair and reasonable, adequate and in the interests of the group members as a whole.
"Today Justice Middleton has acknowledged that this record-breaking settlement has avoided further costly and lengthy legal proceedings. The settlement is a very good result for our clients," Mr Hyde said.
"The case sends a strong message that corporations and their advisors will be held accountable to shareholders if their conduct falls short of what the law requires."
Since issuing Federal Court proceedings in 2008, Maurice Blackburn and litigation funders IMF (Australia) have fought a long battle on behalf of shareholders who lost money in Centro Properties Group and its listed affiliate Centro Retail Group.
The case involved allegations that Centro and its former auditors, PricewaterhouseCoopers, engaged in misleading and deceptive conduct and that Centro breached its obligations of continuous disclosure.
Maurice Blackburn's class actions practice is the largest in Australia and has secured more than $700 million in settlements over the past 14 years (excluding Centro), including:
In March 2011 the firm secured the largest cartel settlement in Australian corporate history, against Amcor and Visy for $120 million.
Centro case history
In 2008, Maurice Blackburn, funded by IMF (Australia), issued Federal Court proceedings on behalf of shareholders alleging that Centro Properties Group and its listed subsidiary Centro Retail Group engaged in misleading and deceptive conduct by not disclosing the full extent of their known debts.
When the two companies eventually revealed the extent of their debts in December 2007 and admitted that they had been unable to refinance billions of dollars of debt that had become payable, their share prices fell dramatically.
It was alleged that Centro Properties and Centro Retail breached their obligations of continuous disclosure and that both companies engaged in misleading and deceptive conduct by failing to adequately disclose to their security holders and to the ASX:
- the full extent of their maturing debt obligations;
- the risk that they may not be able to refinance their maturing debts at forecast cost or at all; and
- the risk that there was no longer a reasonable basis for their respective profit forecasts.
The trial was presided over by Justice Michelle Gordon.