Legal firm Slater and Gordon has announced it has reached a conditional agreement with the former co-operative which was once Australia’s largest milk supplier Murray Goulburn, over a class action brought by investors.
Under the proposed agreement, the Murray Goulburn Co-operative Co Limited entities will pay a total of $42million, inclusive of legal fees and interest, to settle the claims of class action group members. The settlement is subject to Federal Court approval.
The class action was started in August 2018, and was pursued on behalf of more than 1300 institutional and retail investors who acquired Murray Goulburn units between May 29, 2015 and April 27, 2016.
The Murray Goulburn share price tumbled in 2016 after a surprise profit down-grade. The chief executive officer and the chief financial officer resigned.
The proposed settlement was reached ahead of a four-week trial which was due to start in 2020.
Slater and Gordon Practice Group leader Emma Pelka-Caven said the conditional settlement was an outstanding outcome for group members and, if approved, would be a significant recovery of their clients’ losses.
The lead plaintiff in the action was Endeavour River Pty Ltd. Endeavour River director Rod Gibson said for the plaintiffs to recoup such a significant proportion of their losses was an excellent result when at one stage their investments seemed lost.
The proposed settlement will be presented to the Federal Court for approval, and class members will receive details of the proposed settlement shortly.
The Murray Goulburn entities made no admission of liability under the terms of the settlement agreement.
The class action filed by Endeavour River is a separate proceeding to the open class action proceeding filed by John Webster ATF the Elcar Pty Ltd Super Fund Trust in 2017. The Webster proceeding is continuing and the open class members in that proceeding are not participants in this settlement.