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A marathon class action between about 6000 Australian investors and retail property group Centro and its auditor PricewaterhouseCoopers has today come to an end after the aggrieved shareholders agreed to a $200 million settlement.
Slater and Gordon general manager commercial and project litigation James Higgins said that after several days of intense negotiation, the deal was finalised this morning and a deed of settlement agreed upon.
The parties advised Her Honour Federal Court Justice Michelle Gordon this morning and sought orders to halt the trial pending approval.
Mr Higgins said the settlement involving joint defendants Centro Property Group (CNP), Centro Retail Trust (CER) and PricewaterhouseCoopers (PwC) was a significant victory for investors’ rights.
Slater and Gordon represented the bulk of the claimants – nearly 5000 predominantly mum and dad or retiree investors – who will share in about $50 million from the total $200 million settlement.
Most of Slater and Gordon’s clients came from NSW and the ACT, with 1740 represented in the class action, followed by Victoria with 1662, QLD with 738, WA with 328, SA with 264, TAS with 57 and NT with 10.
The settlement came almost four years to the day after Slater and Gordon commenced its class action on May 23, 2008, amid allegations Centro directors mislead investors in a 2007 financial report.
The case went to trial in March at the Federal Court in Melbourne, where it was claimed CNP and CER failed to adequately disclose the financial risk to which its investors were exposed when financing the acquisition of US-listed shopping trust, New Plan Excel Realty in April 2007.
The class action group members purchased shares between July 17, 2007, and February 28, 2008.
“We are pleased to have reached a settlement and we are proud to have represented thousands of mums and dads and retirees and to have attained some justice on their behalf,” Mr Higgins said.
“It was a very important fight for the rights of investors who do their best to make informed decisions concerning their life savings but remain vulnerable to corporations who fail to meet their legal obligations.
Mr Higgins praised the commitment of lead plaintiffs Nicholas Vlachos and Ramon Franco, who gave evidence on a number of days during the trial.
“They took on an enormous responsibility in their pursuit of justice for themselves and fellow shareholders and for that they should be applauded,” Mr Higgins said.
Mr Higgins said Slater and Gordon would write to clients advising them of payment dates and amounts when and if the settlement was finalised and approved by the Federal Court.
“We are very pleased that as with our legal actions over the collapse of Storm, Fincorp, Opes Prime and Westpoint we continue to deliver compensation to ordinary Australians and assist in the recovery of lost savings.”
The class action was funded by litigation funder CLF.
"Without the support of CLF the litigation would not have been possible. CLF was also the litigation funder of the Opes Prime litigation and so now has an established track record in the Australian market," he said.