Posted on 27 Nov 2019
Slater and Gordon has today announced a conditional agreement has been reached with Bellamy’s Australia Ltd to settle an open class action on behalf of group members who invested in the company during 2016 (the McKay class action).
Under the proposed agreement, which remains subject to Court approval, Bellamy’s will pay a total of $49.7 million, inclusive of legal fees and interest, to settle the claims of group members in two class action proceedings brought against the company in 2017.
The second class action filed by Peter Basil against Bellamy’s is a separate proceeding conducted by another firm and which was case managed together with the McKay class action.
Slater and Gordon Senior Associate Kaitlin Ferris said: “Slater and Gordon commenced this claim on behalf of Bellamy’s shareholders in early 2017, after a series of market updates from the company saw the price of its shares plummet.”
“This settlement is a good outcome for group members and will now be presented to the Court for approval. If the settlement is approved, we expect to distribute settlement funds to class members in the first half of 2020,” Ms Ferris said.
“As a result of this settlement, Bellamy’s shareholders will receive some of the money the class actions alleged that they lost as a result of purchasing shares in a market which we said was infected by misleading statements and non-disclosure.”
Ms Ferris said the recent decision in TPT Patrol v Myer had given shareholder class action practitioners clarity around common features of claims similar to the Bellamy’s proceeding, including what was required to establish continuous disclosure breaches and confirmation that market-based causation was an accepted principle of Australian causation law.
“Justice Beach’s decision in the Myer case confirms that a company which has information relating to financial underperformance and fails to update the market will fall foul of the continuous disclosure regime which governs participation in the ASX,” Ms Ferris said.
“These are not onerous laws, particularly in the context of the significant benefits a company derives from listing on the ASX.
“ASX listed companies’ shares form a material part of thousands of superannuation funds and investment portfolios, and it is entirely appropriate that listed companies be required to disclose information they have which is adverse to investors’ assessment of their value.”
The Bellamy’s class action was funded by one of the world’s leading dispute resolution financiers, IMF Bentham (ASX:IMF). IMF has a strong track record financing disputes around the world, including successful class actions in Australia and globally.
IMF Bentham Investment Manager Kristen Smith said: “IMF Bentham is pleased to assist shareholders to recover substantial compensation for their investment losses. Over our 18-year history IMF has returned $1.5 billion to funded claimants."
The claims of group members in both proceedings form part of the settlement, with the settlement sum to be distributed in accordance with a proposed distribution scheme to class members in both proceedings. Bellamy’s makes no admission of liability under the terms of the proposed settlement agreement.
Media Contact Therese Allaoui (03) 9602 6844 / 0428 994 937