Nufarm class action finalised after Federal Court agrees on settlement terms
Posted on 30 Nov. 2012
Federal Court Justice John Middleton has today approved a $46.6 million class action settlement between agricultural company Nufarm and aggrieved shareholders.
Slater and Gordon, lawyers for the majority of the class action group members, welcomed the outcome on behalf of more than 700 clients who claimed they had lost money as a result of Nufarm breaching its ASX reporting obligations in FY2010.
Nufarm had agreed to an in-principle settlement of $43.5 million following a mediation in Melbourne on August 1, but Slater and Gordon class action lawyer Odette McDonald said the amount had increased after a larger-than-expected number of aggrieved shareholders joined the proceedings.
Ms McDonald described the settlement, more than a year before the case was scheduled to go to trial, as a great result for shareholders.
“It really means a significant reduction in legal costs and a bigger return for those investors seeking to recoup lost funds,” Ms McDonald said.
“Settlements of this scale demonstrate that importance of shareholder class actions in achieving returns for shareholders.”
Ms McDonald said the firm would be informing clients in coming days about the next steps.
"Slater and Gordon represents the majority of the claim group, including a significant number of institutional and retail investors, so this is a pleasing result,” she said.
The class action alleged group members suffered financial loss after Nufarm’s failure to adequately disclose Australian Securities Exchange the impact of the declining international glyphosate market on its business, profitability and likely debt position at various times during FY2010.
Nufarm denies liability for this under the terms of the settlement.
In July 2010, Slater and Gordon was approached by shareholders and asked to commence investigations into a potential class action against Nufarm after the company halved its underlying net profit guidance from between $110 million and $130 million to between $55 million and $65 million.
A claim was lodged in the Federal Court of Australia on January 14, 2011, on behalf of investors who acquired Nufarm shares between March 2, 2010, and August 31, 2010.
The class action alleged Nufarm’s profit forecast for the 2010 financial year provided on March 2, 2010, was misleading and deceptive as the company did not have reasonable grounds to forecast an underlying net profit of $110 million to $130 million.
The class action also alleged that by failing to revise its profit guidance until July 14, 2010, Nufarm had breached its continuous disclosure obligation.
Slater and Gordon expanded its investigation period to August 31 after a Nufarm disclosure on September 1, 2010, that its net debt as at July 31, 2010 was substantially higher than previously forecast.
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