Claims

Registry

Victorian Registry, Federal Court of Australia (VID326/2008, VID 327/2008, VID366/2008, VID1028/2010, VID1041/2010).

The Action

On 9 May 2008 Maurice Blackburn commenced related class actions in the Federal Court against the ASX -listed entities Centro Properties Ltd (‘Centro Properties’) and Centro Retail Ltd (‘Centro Retail’).

The actions were brought on behalf of all those who purchased or acquired an interest in Centro Properties and/or Centro Retail securities during the relevant periods and who had entered into a funding agreement with IMF (Australia) Ltd as at the date the class actions were commenced.

The relevant period for the Centro Properties claim was 9 August 2007 to 15 February 2008 and the relevant period for the Centro Retail claim was 7 August 2007 to 15 February 2008.

Allegations

The claim alleged that in the period August 2007 to February 2008 Centro Properties and Centro Retail breached their obligations of continuous disclosure under the ASX Listing Rules and the Corporations Act. It further alleged that both companies engaged in misleading and deceptive conduct by failing to adequately disclose to their security holders and to the ASX:

  • the full extent of their maturing debt obligations;
  • the risk that they may not be able to refinance their maturing debts at forecast cost or at all; and
  • the risk that there was no longer a reasonable  basis for  their respective profit forecasts.

By way of example, Centro Properties stated in its annual results released in August 2007 that it had no interest bearing current liabilities on its balance sheet as at 30 June 2007. Centro Properties later confirmed that the amount of interest bearing current liabilities that should have appeared on its 30 June 2007 balance sheet was $2.7 billion.

When Centro Properties and Centro Retail eventually revealed the extent of their maturing debt obligations and when they revealed that they had been unable to refinance billions of dollars of debt that had become payable, their share prices fell dramatically.

Settlement     

Settled for $200 million on 19 June 2012 with $150 million to Maurice Blackburn claimants and $50 million to Slater and Gordon claimants. Administration and distribution of the settlement was completed in January 2013.

Funder

IMF Bentham.

Judgments

1. Permission of 3 claims (10 October 2008).

2. Judge Bias (14 November 2008).

3. Auditor (15 October 2010).

4. Insurance Discovery (26 June 2009).

5. Pleading (6 June 2011).

6. Judge Bias (2 November 2011).

7. Video Evidence (7 February 2012).

8. Privilege/Discovery (10 February 2012).

9. Evidence (13 March 2012).

10. Evidence (29 March 2012).

11. Pleading (4 May 2012).

12. Settlement Approval (19 June 2012).