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Slater and Gordon (SGH) has filed a shareholder class action against Freedom Foods Group Limited (FNP.AX) (‘Freedom Foods’ or ‘FNP’) and Freedom Food’s auditors, Deloitte Touche Tohmatsu (‘Deloitte’), on behalf of persons that acquired FNP securities between 7 December 2014 to 24 June 2020 (inclusive) (Claim Period).

The proceeding alleges that eligible shareholders have claims against Freedom Foods and Deloitte as a result of acquiring FNP securities in the Claim Period at an inflated price due to the allegedly misleading conduct of Freedom Foods and Deloitte, as well as Freedom Foods’ alleged contravention of its continuous disclosure obligations.

Latest Update

A second proceeding has now been filed in the Supreme Court of Victoria against Freedom Foods and Deloitte. The second proceeding covers investors who purchased Freedom Foods shares over the same time period, and is being run by the law firm Phi Finney McDonald with support from the litigation funder Omni Bridgeway.

As a result of the above, the proceeding will now head to Court to have what is termed a “carriage motion”, which has been listed for hearing on 17 September 2021. The carriage motion involves all parties to both proceedings and a contradictor potentially giving evidence in relation to the issue of multiplicity, and having the Court determine the outcome.

We will provide further updates as to the progress of the proceedings as they arise to ensure that group members remain informed.

Allegations

The proceeding alleges that Freedom Foods:

  • contravened its obligations of continuous disclosure of price sensitive information under section 674 of the Corporations Act 2001 (Cth) (the Act), by failing to release material information relevant to its financial performance during the Claim Period in respect of inventory, property plant and equipment, goodwill, trade and receivables, bad and doubtful debt, and other matters; and
  • made statements about its financial performance which amounted to misleading or deceptive conduct, in contravention of section 1041H of the Act, section 12 DA of the ASIC Act and s 18 of the Australian Consumer Law.

The proceeding also alleges that Freedom Foods’ half-year and full year financial reports did not provide a true and fair view of Freedom Foods’ financial position and that Deloitte had not obtained sufficient audit evidence to provide a basis for its audit opinions in each of those reports between FY14 and FY19. It is further alleged that the auditor’s conduct in the Claim Period misled investors, in contravention of section 1041H of the Act, section 12 DA of the ASIC Act and s 18 of the Australian Consumer Law.

Claim Period

The proceeding relates to the conduct of Freedom Foods and Deloitte between 7 December 2014 and 24 June 2020 (inclusive).

Investors who purchased shares in Freedom Foods (FNP) during this period may be group members in the proceeding.

Registration

Investors who have purchased shares at any point between 7 December 2014 to 24 June 2020 (inclusive) may register their claim by executing a Legal Cost Agreement using the registration link below. However, as noted below, at this stage it is not necessary to execute a legal costs agreement to participate in the proceeding.

You will not be exposed to any out-of-pocket costs or adverse costs orders as a result of your participation or registration in the claim.

Frequently Asked Questions

You may meet the definition of a group member in the proceeding if you acquired ordinary shares or derivatives in Freedom Foods (FNP) between 7 December 2014 and 24 June 2020 (inclusive).

If you are unsure about your eligibility, please contact our team at FreedomFoods@slatergordon.com.au or 1800 071 827. As we are receiving a large number of contacts from investors at this time, please be advised it may be 48 hours before you receive a response to your enquiry.

The proceeding has been issued on an open class basis. Individuals who meet the group member definition who do or do not wish to participate in the proceeding are likely to be invited by the Court during the course of the proceeding to register or opt out of the class action.

It is likely that the Court will require group members who wish to claim an entitlement to a share of any settlement sum or damages award to register their participation in the class action through a Court-ordered registration process. Ordinarily, the Court will accept that group members who have entered into a retainer and become a client of the law firm representing the class by executing a legal costs agreement are automatically registered and are not required to complete any further steps to safeguard their involvement in the claim.

You can register by completing your details and executing a legal cost agreement here. By executing the legal costs agreement you will secure your entitlement to a share of any resolution sum obtained in the event that the proceeding is successful, and will be eligible to receive legal advice regarding your participation in the claim.

Alternatively, you can await a further notification from the Court regarding a Court-ordered registration in the proceeding and provide your details at that time.

If you are unsure about your registration status, please contact our team at FreedomFoods@slatergordon.com.au or 1800 071 827.

You will not be exposed to any out-of-pocket costs as a result of your participation or registration in the claim.

Given the complex and large-scale nature of class action proceedings, the duration of a class action can differ between claims, with due regard to the case specific matters and the conduct of the parties to the proceeding.

Generally speaking, class actions can take 2-3 years from the date of issue to resolve and may settle by agreement between the parties prior to judgement by the court. As this is a complex proceeding alleging wrongdoing over a six-year period, it may take longer. We will however work to ensure the proceeding is run as efficiently and cost-effectively as possible.

Registered group members have a narrower role in the proceeding than the representative applicant who is named and brings the action on behalf of all group members. It is likely that your involvement as a group member will be limited to:

  • registering your claim, if you wish to be eligible to share in any resolution sum;
  • providing proof of your claim, for the purposes of quantifying your alleged loss and damage;
  • providing your details for the purposes of receiving any entitlement to the resolution sum, in the event of a successful outcome.

If you wish to receive regular updates about developments in the claim, we would encourage you register your details and execute a legal costs agreement by completing the above registration form.

You will not be exposed to any out-of-pocket costs or adverse costs orders as a result of your participation or registration in the claim.

As a group member, if you register in the claim or do not opt out of the claim, you will be bound by the terms of any settlement reached between the parties or any judgment by the Court.