On Friday 23 May 2008, Slater & Gordon commenced a class action on behalf of stapled security holders in Centro Properties Group (CNP) and Centro Retail Trust (CER).
The claim has been commenced on behalf of three plaintiffs as representatives for all CNP and CER security holders that:
- Acquired their securities between 5 April 2007 and 28 February 2008; and
- Have not (by 9 May 2008) signed litigation funding agreements with IMF (Australia) Limited.
The claim alleges that CNP and CER failed to adequately disclose the financial risk to which the entities were exposed when financing the acquisition of the US listed shopping trust, New Plan Excel Realty, in April 2007. The acquisition required CNP and CER to assume billions of dollars of debt which had to be refinanced during or before December 2007.
It is alleged that both CNP and CER breached Australian Accounting Standards and engaged in misleading conduct, when they misclassified this debt as non-current in their 30 June 2007 financial reports. It is further alleged that CNP and CER then failed to disclose the existence of these liabilities at all until 17 December 2007 and, even then, did not disclose the full extent of those liabilities until 28 February 2008.
The litigation is being funded by Comprehensive Legal Funding LLC, a US- headquartered litigation funder.
The claim seeks damages for the losses suffered by CNP and CER security holders as a result of purchasing stapled securities during the relevant period at artificially inflated values.