|Claim Period:||20-Aug-13 to 06-Dec-13|
|Shares traded in Period($m):||384.8|
|Price change on disclosure:||-$3.45|
|Market Cap Drop ($m):||4,232.7|
Victorian Registry, Federal Court of Australia (VID513/2015).
Money Max Int Pty Ltd v QBE Insurance.
Date of Filing
9 September 2015.
Solicitors for Applicant
Counsel for the Applicant
Michael Lee SC and William Edwards.
Solicitors for Respondent
International Litigation Funding Partners Pty Ltd (‘ILFP’).
Status of Claim
The claim is settled subject to Court approval with consent orders made on 27 October 2017; including 27 November being fixed as the date before which opt out may occur and registration to participate in any settlement.
People who at some time during the period 20 August 2013 to 6 December 2013 inclusive, acquired an interest in ordinary fully paid shares in QBE and who have not opted out.
On 9 December 2013 QBE announced that it was not going to meet earlier profit and financial performance guidance and that, in fact, it was expecting to incur significant write-downs and post a loss of around $250m for FY13 (ending 31 December 2013). When confirmed in February 2014, the reported loss of $254m was the first for the company since 2001. The major contributor to QBE’s poor results, and its shock announcement on 9 December 2013, was the bad news from QBE’s North American operations.
The revelation on 9 December 2013 for the poor results understandably surprised investors. Only four months earlier, QBE’s half year report in August 2013 fed market expectations of a profit in excess of $1 billion for FY13 and a turn-around of its problematic North American operations.
Maurice Blackburn allege that on and from 20 August 2013, QBE made representations about its North American Operations without reasonable grounds and failed to inform the market that there was a material risk that:
1. North American Operations
- QBE’s financial performance and financial results for 2013 would be adversely affected by the performance of its North American Operations; and/or
- earnings guidance given by QBE in respect of its financial performance and financial results was unreliable;
2. North American Program Business
- QBE would need to make provisions for the NA Program Business materially in excess of existing provisions;
- QBE’s earnings guidance so far as it concerned the NA Program Business was unreliable;
3. FPS Business
- QBE would recognize a charge materially in excess of the US$66m existing charge and a material impairment to its goodwill;
- QBE’s earnings guidance so far as it concerned the FPS Business was unreliable;
4. Crop Business
- existing QBE guidance was unreliable.
Shares Traded in the Period
Open class. Opt-out Notices not yet sent.
Price Drop on Disclosure
$4.63 per share (Market cap drop of $5.68bn).
Capacity to Join
Common Fund (26 October 2016).