Event and Time
Event Description
- Case Title: McConnell and Nakali v SurfStitch Group Limited
- Context: Representative proceedings initiated by shareholders against the SurfStitch Group and its former CEO for failing to disclose material information and misrepresenting financial forecasts, leading to significant financial losses for shareholders.
- Key Dates:
- Proceedings initiated by Nakali (May 2017) and McConnell (June 2017). - SurfStitch enters administration (August 2017). - Settlement proposals begin and undergo various negotiations (2018-2020).
Application and Claims
- Plaintiffs: TW McConnell Pty Ltd and Nakali Pty Ltd.
- Claims:
- Failure to advise the Australian Securities Exchange of material information. - Misleading statements regarding EBITDA forecasts, impacting share value.
- Defendant Additional Claims: McConnell also claims against former CEO Justin Cameron.
- Funders: Two litigation funders, International Litigation Partners and Vannin Capital, finance the proceedings.
Judicial Decisions
- Initial Settlements: Agreements around Deeds of Company Arrangement and contributions from D&O insurers approved by the court as reasonable.
- Final Ruling: Approval granted for the settlement with conditions regarding the capping of costs and commissions to $6.5 million, ensuring fairness for all involved.
Dispute Points and Legal Basis
Dispute Points
- Plaintiffs’ Position:
- Asserted strong claims based on the lack of material disclosures and misleading communications. - Proposed settlement deemed the best achievable given the circumstances, aimed to recover costs while maximizing returns for group members.