Slater & Gordon shareholder class action

On 12 October 2016, Maurice Blackburn commenced a representative proceeding against Slater & Gordon Ltd (SGH) under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCAA) on behalf of the Applicant, Matthew Hall, and all persons who acquired an interest in fully paid ordinary SGH shares between 30 March 2015 and 24 February 2016 (Hall Class Action). An in-principle settlement was reached in July 2017, and a Deed of Settlement was executed in September 2017. Following two settlement approval hearings, settlement of the proceedings (Hall Settlement) was approved by the Court under section 33V of the FCAA on 14 December 2017.

What actions do you need to take?

All persons who acquired an interest in fully paid ordinary shares of SGH during the period 30 March 2015 to 24 February 2016 and did not opt out of the class action by the date ordered by the Court are Hall Group Members.

If you are a Hall Group Member and have previously registered with Maurice Blackburn, you will receive a Notice of Claim Data and Participant Declaration which you must complete and return by the 5.00PM AEDST on 23 February 2018.

If you have not registered with Maurice Blackburn, you must complete and return this Registration Form and Participant Declaration to Maurice Blackburn by email or post (see contact details below) by 5.00PM AEDST on 23 February 2018.

You will not be eligible to receive a distribution from the Settlement Distribution Fund if you do not return a valid Participant Declaration to Maurice Blackburn by 5.00PM AEDST on 23 February 2018.

About the Hall Settlement and the SCS

On 12 October 2016, Maurice Blackburn commenced a representative proceeding against Slater & Gordon Ltd (SGH) under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCAA)on behalf of the Applicant, Matthew Hall, and all persons who acquired an interest in fully paid ordinary SGH shares between 30 March 2015 and 24 February 2016 (Hall Class Action).

An in-principle settlement was reached in July 2017, and a Deed of Settlement was executed in September 2017. Following two settlement approval hearings, settlement of the proceedings (Hall Settlement) was approved by the Court under section 33V of the FCAA on 14 December 2017.

The total settlement amount is $36.5 million. Slater and Gordon’s insurers will pay $32.5 million (Insurer Contribution), which represents most of what remained available under the company’s insurance policies.  Slater & Gordon, through financing provided by its Senior Lenders, is paying $4 million (SGH Contribution). The Insurer Contribution, net of approved legal costs and funding costs, will be used to set up the Shareholder Claimant Scheme Fund (SCS Fund). The SGH Contribution will not go into the SCS Fund and will be distributed only to Hall Group Members along with their share of the SCS Fund through the Hall Settlement Distribution Scheme.

Also at the 14 December 2017 hearing, the Court approved two creditors’ schemes of arrangement that SGH propounded under Part 5.1 of the Corporations Act 2001 (Cth) in order to restructure the company without entering into external administration. These are the Senior Lender Scheme between SGH and its secured creditors, and the Shareholder Claimant Scheme (SCS), which operate in conjunction with the Hall Settlement. Mark Korda and Bryan Webster of KordaMentha have been appointed by the Court as “Scheme Administrators” of the SCS. Further information about the SCS is available at: www.kordamentha.com/Creditors/Slater-Gordon-Scheme.

Following the court approval of the Hall Settlement, the SCS is now in progress. On 30 January 2018, Maurice Blackburn submitted a Proof of Debt for approximately 5,000 registered Hall Group Members with approximately 8,800 shareholdings in the Hall Settlement against Slater & Gordon Ltd (SGH) to the Scheme Administrators. The next step in the process is for the Scheme Administrators to adjudicate the proofs submitted to the SCS.  Under the terms of the Settlement and the SCS, the Proof of Debt submitted by Maurice Blackburn must be accepted in its full amount.

The amount which the Scheme Administrators determine is payable to Hall Group Members will be paid to Maurice Blackburn in the first instance, and it will then be distributed through the Settlement Distribution Scheme approved by the court on 14 December 2017.  The additional SGH Contribution of $4 million will be added to the amount received from the SCS, so that group members receiving a distribution will receive both their pro rata share of the amount paid out of the SCS and their pro rata share of the SGH Contribution.

The distribution of the settlement funds is governed by the Settlement Distribution Scheme, available here. Schedule B of this document is subject to confidentiality orders. If you are a Participant under the Settlement Distribution Scheme and would like to inspect Schedule B, you will need to sign a confidentiality undertaking - please contact SGHSettlement@mauriceblackburn.com.au for more information.

Contact details

If you need any further information, please don’t hesitate to contact us on 1800 572 151 (+61 1800 572 151 for international callers), by emailing SGHSettlement@mauriceblackburn.com.au, or by mail to the address below:

SGH Settlement Administrator
Maurice Blackburn Lawyers
Level 21, 380 Latrobe Street
Melbourne VIC 3000