On 12 October 2016, Maurice Blackburn filed a class action against Slater and Gordon Limited (SGH) on behalf of persons who acquired an interest in SGH shares between 30 March 2015 and 24 February 2016.
Opt-out Notice and Notice of Proposed Settlement
On 25 September 2017, the Federal Court approved the form of a notice to be sent to Group Members with information about the settlement. The notice contains important information about the settlement. The notice will also be distributed to Registered Group Members in accordance with the Court’s orders.
As previously advised, the parties agreed to a settlement of the SGH Class Action on 11 July 2017. All class action settlements are subject to the approval of the court. The Federal Court in Melbourne will hear the application for settlement approval on 16 November 2017 at 10.15am.
If you have already registered with Maurice Blackburn, unless you wish to object to the settlement, there is nothing you need to do at this stage in order to progress your claim. If you would like to participate in the settlement and have not previously registered with Maurice Blackburn, you may register your details here.
In-principle settlement reached in Maurice Blackburn’s shareholder class action against Slater and Gordon
A shareholder class action against Slater and Gordon (SGH) has settled in-principle, subject to final documentation, court approval and a number of other conditions, Maurice Blackburn Lawyers confirmed on July 11 2017.
Under the proposed settlement, Slater and Gordon’s insurers will pay $32.5 million, which represents all but a small proportion of what is available under the company’s insurance policies, with the hedge funds who bought nearly all of the company’s debt making a $4 million contribution.
The proposed $36.5 million settlement, which will operate in conjunction with a shareholder creditor scheme, also preserves shareholders’ ability to continue to pursue third parties for their proportionate share of the overall responsibility for losses to shareholders (known as apportionable claims), but will mean non-apportionable claims cannot be brought against third parties.
Maurice Blackburn National head of Class Actions, Andrew Watson, said the settlement was the best outcome from a terrible situation for shareholders, given the diabolical alternative which meant likely insolvency for Slater and Gordon.
Slater and Gordon does not have any assets that would be available to fund a settlement or satisfy a judgment against the company. Presently, the company’s level of secured debt significantly exceeds the value of its assets, and, as secured creditors, the new owners of Slater and Gordon’s debt hold a fixed and floating charge over those assets. As a result, the only source of potential recovery from the company for shareholders are the benefits of responsive insurance policies.
Earlier this year Maurice Blackburn applied for orders requiring Slater and Gordon to produce the relevant insurance policy documents. The policy limit on the insurance coverage is unexpectedly low, and the policy limits represent, on any measure, only a small fraction of the class members’ losses.
“Given the insurance policy limits, and the fact that Slater and Gordon’s defence costs for all actions also come out of the insurance, the proposed settlement will avoid further erosion of the available funds and return to class members as much of what remains under the policies as possible,” Mr Watson said.
The settlement is made without admission of liability.