Claims

Two competing class actions against developer Lendlease. A hearing to argue which class action should proceed has been scheduled on 21 November 2019 before Justice Hammerschlag.

Maurice Blackburn
Registry

Supreme Court of NSW (2019/00122037​).

File Title

David William Pallas & Julie Pallas as trustees for the Pallas Family Superannuation Fund v Leandlease Corporation Limited.

Presiding Judge

Justice Hammerschlag.

Solicitors for Applicant

Maurice Blackburn Lawyers.

Solicitors for Respondent

Herbert Smith Freehills.

Funder

Harbour Litigation Funding.

Claim Overview

On 9 November 2018, LLC announced to the market that it had identified ‘further underperformance’ in its Engineering and Services Business, which it considered was likely to necessitate a provision of approximately $350 million after tax. LLC also announced that it was reviewing its Engineering and Services Business in light of that underperformance.

The market reacted sharply to the announcement, with LLC’s share price dropping by more than 18% in a single day of trading on 9 November 2018.

In its half year results presentation on 25 February 2019, LLC Managing Director Stephen McCann noted his ‘disappointment’ with pre-tax losses of $500 million arising from underperformance of its Engineering and Services Business. LLC announced that it now considered the Engineering and Services Business was ‘no longer a required part of the Group’s strategy,’ and it expected to incur restructuring costs of between $450 million and $550 million pre-tax as a result of that decision. In the following days LLC’s share price declined further.

The class action alleges that LLC failed to comply with its continuous disclosure obligations under the Corporations Act 2001 (Cth) and the ASX Listing Rules and engaged in misleading and deceptive conduct in respect of the performance of its Engineering and Services Business.

Class Members

The action has been commenced on behalf of aggrieved Lendlease investors who acquired an interest in Lendlease shares and/or American Depositary Receipts between 17 November 2017 and 8 November 2018 (inclusive). We will allege that investors who acquired securities in this period paid an inflated price and should be entitled to recover some of their losses through our shareholder class action.

Capacity to Join

Open.

 

Phi Finney McDonald
Registry

Supreme Court of NSW (2019/00244030​).

File Title

Martin John Fletcher v Lendlease Corporation Limited.

Presiding Judge

Justice Hammerschlag.

Solicitors for Applicant

Phi Finney McDonald.

Solicitors for Respondent

Herbert Smith Freehills.

Funder

Therium Litigation Finance.

Claim Overview

On 9 November 2018, LendLease announced to the market that it had identified significant underperformance in its engineering division relating to a number of projects. This shocking underperformance required a previously unannounced provision of $350m, leading to a negative margin for the construction segment.

LendLease blamed lower productivity in post-tunnelling phases of the NorthConnex tunnel project (a tollway under construction in Sydney, Australia), as well as unforeseen remedial work and bad weather on the Gateway Upgrade North and Kingsford Smith Drive projects, for the underperformance.

On receiving news of this massive underperformance, there was a substantial market reaction which wiped $4.73 (approximately 27%) off the value of LendLease shares over the following three trading days. Top tier market analysts expressed “surprise” and “disappointment” at the scope of the construction segment’s underperformance and the consequent impairment.

On 25 February 2019, LendLease released its half-year 2019 results to the market. The results disclosed additional costs arising from underperformance in the engineering division. The share price declined $0.91 (approximately 6.4%) on 25 February 2019. By close of trade on 27 February 2019, LendLease’s share price had declined $1.35 (approximately 10%).

Class Members

All current and former shareholders who acquired an interest in LendLease stapled securities and American Depositary Receipts during the period from 17 October 2017 to 25 February 2019 are invited to register for the proposed class action.

Capacity to Join

Open.