Posted on 27 Jun. 2012
The Federal Court today approved the terms of settlement in the long-running Slater and Gordon Centro shareholder class action.
The class action commenced in May, 2008, following the near-collapse of the Centro group in late 2007.
Slater and Gordon's clients had alleged that the company and its auditors, PricewaterhouseCoopers, had misled the sharemarket by failing to reveal critical information about billions of dollars in short term debt.
Slater and Gordon's clients, about 5,000 mostly 'mum and dad' investors, agreed on a settlement figure of $50 million last month. When combined with the settlement of a parallel proceeding run by other solicitors, the result represented the biggest shareholder class action settlement in Australian history.
Federal Court Justice Middleton approved the terms of the settlement this morning, giving Slater and Gordon the green light to begin the process of distributing settlement proceeds to thousands of investors who had suffered loss.
Slater and Gordon principal lawyer Toby Borgeest said today was an important milestone for investors.
"Settlement of this class action brings to an end a long fight for compensation,” Mr Borgeest said. “Slater and Gordon's clients were predominantly small investors who had entrusted retirement savings with Centro.
“Settlement means an end to uncertainty, and that we can now move to distributing funds."
Mr Borgeest said the distribution process would involve careful verification of individual group member claims over the coming months and it's likely that cheques will be issued before the end of the year.
The class action was funded by litigation funder Comprehensive Legal Funding LLC, which meant individual investors had not had to pay fees to keep the litigation going, and were protected from orders for payment of the legal costs of Centro and PwC.