Class Action – Estia Health Limited (ASX:EHE)
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Background to the allegations
|Claim Period:||12 August 2015 to 5 October 2016|
|Shares traded in Period:||376 million|
It is alleged that Estia Health Ltd (Estia) engaged in misleading or deceptive conduct, and breached its continuous disclosure obligations by:
- providing or maintaining earnings guidance for the 2016 and 2017 financial years (FY16 and FY17) which lacked reasonable grounds;
- failing to disclose to the market serious difficulties within its business which were likely to have the effect of significantly reducing the company’s future prospects for earnings growth; and
- making misrepresentations in relation to Estia’s Medium Term Growth Strategy due to the decline in refundable accommodation deposits (a significant driver of Estia’s profitability) and the impact that decline had on Estia’s mid-term financial performance.
We consider that investors who acquired and held Estia shares during the claim period have a reasonable basis to seek to recover from Estia the amount of losses they have suffered from the purchase of those shares.
Shareholders who acquired an interest in Estia shares traded on the ASX during the period 12 August 2015 to 5 October 2016 inclusive.
- In early 2019, the group member client and Estia actively explored how a pre-commencement mediation protocol would be structured, what would be required from both parties (in terms of document discovery confidentiality regimes) and what the likely timing of this process would entail.
- Ultimately, Estia withdrew from negotiations and a pre-commencement mediation protocol was never agreed upon. Since that time, the lawyers have been working to finalise the statement of claim for the purpose of commencing proceedings in the Federal Court of Australia.
- The statement of claim was filed on 19 July 2019.
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