Billabong settles shareholder class action

BillabongBillabong has agreed to pay $45 million to settle a shareholder class action relating to its share price collapse in 2011.

The class action alleged the retailer did not comply with its continuous disclosure obligations and mislead investors over earnings forecasts.

Under the proposed agreement, which is subject to Federal Court approval, Billabong will pay a total of $45 million, inclusive of legal costs, to settle the claims of class action group members.

The retailer said the settlement is without any admission of liability by Billabong and will have no material impact on the company’s financial results as it has already been included in past financial results.

The class action was brought by law firm Slater and Gordon and commenced in 2015 on behalf of approximately 730 institutional and retail investors who acquired Billabong securities between February 18, 2011 and December 19, 2011.

The proposed settlement was reached ahead of a seven week trial, which was scheduled to commence in March 2017.

Slater and Gordon class action lawyer, Odette McDonald, said the proposed settlement was a fantastic result and class action participants will no doubt welcome the news.

“This is an excellent outcome for group members and, based on our assessment of their losses, investors will receive a strong return if the settlement is approved,” McDonald said.

“Slater and Gordon’s class action was supported by a large group of current and former shareholders, ranging from small retail investors to prominent institutional investors.”

The lead plaintiff in the action was Newstart 123 Pty Ltd, trustee for the Malone Family Superannuation Fund.

Newstart director, Stephen Malone, said the great result highlights the importance of class actions as a protection mechanism for investors.

“This was not something I could have pursued alone, without a class action,” Malone said.

“Slater and Gordon fought this litigation from day one and recovered compensation on behalf of hundreds of investors who might otherwise have received nothing.”

The proceedings were funded by litigation funder Comprehensive Legal Funding (CLF). CLF has funded major successful class actions including cases against Newcrest Mining, GPT, Sigma Pharmaceuticals, Nufarm, Centro and Opes Prime.

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