Proceedings were brought against RCR Tomlinson Ltd (in liquidation) and two of its former directors (the second and third defendants), alleging breach of continuous disclosure obligations and that each of the defendants engaged in misleading or deceptive conduct by statements made concerning the performance and prospects of RCR’s business in the months leading up to external administration.
Offers of settlement were made with the second and third defendants on the basis of certain deficiencies in the claim; broadly, the statements made were in a company ASX announcement (therefore likely the conduct of the company) and the statements made were said to be of opinion as to the outlook of the business and the intended audience would not have been misled by the statements.
The proceeding against the company itself was to continue.
Broadly, the terms of Deeds of Release and Settlement provided for:
The settlement was approved notwithstanding that the representative plaintiff gained more from the settlement than the class members (i.e. the plaintiff reduced their exposure to adverse costs while class members received nothing). The Court held that it was still appropriate to approve the settlement, taking into consideration that no objections had been received from any class member.
Supreme Court of New South Wales, Rees J,
5 April 2023
Plaintiff’s Solicitors: Quinn Emanuel Urquhart & Sullivan
Second Defendant’s Solicitors: Mark O'Brien Legal
Third Defendant’s Solicitors: Johnson Winter & Slattery
Plaintiff’s Funder: Omni Bridgeway and Burford Capital
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