Our Archive

IMPORTANT NOTICE TO GROUP MEMBERS

Proceedings 2017/193375 & 2017/347082

11 June 2020

On 23 March 2020 and 14 April 2020 the Honourable Justice Ball made orders that due to:

  1. The change in the law in December 2019 following the High Court decision in BMW v Brewster, which invalidates the operation of the common fund order previously sought by the Plaintiffs in the First Notice Regime; and
  2. the SurfStitch Deed Administrators re-evaluating their estimated value of the convertible notes available in the SHPL and SGL Deeds of Company Arrangement (DoCAs) from $6m to $19m to $0 to $4.25m and cash from $2.7 m to $3m, to $2.4m to $2.7m,

the settlement participation deadline be extended to 4 pm AEDT on 24 April 2020 (Second Registration Deadline), and that all group members who either did not register under the First Notice Regime  during November 2019 or who previously opted out (Non-Participating Group Members) be given the opportunity to re-register for the settlement of the SurfStitch Class Actions.

The Second Registration Deadline has now passed. Gadens and JWS received a total of 903 confirmed registrations, including several large institutional shareholders and custodians.

What if I have already registered for the settlement or I am a Funded Group Member?

All Funded Group Members and registrants of the First Notice Regime have been recorded as registrants of the Second Notice Regime.

What if I missed the Second Registration Deadline?

Gadens has recorded 51 late registrants, who we have sought be included in the settlement from the Court via the Plaintiffs’ evidence filed 26 May 2020. Further registrations for the settlement received post the 26 May 2020 will not be accepted unless there is a Court Order to that effect. This is because all registrants’ preliminary losses have now been assessed and included in the revised loss report.

From what data is my loss assessed?

Your claim loss will be assessed based on your trades under your HIN/SRN number, unless you traded through a custodian or broker. If you fall into the latter category, your trade proofs supplied will be used for assessment.

How much will my return be?

Gadens are unable to say with specificity at this stage the sum which each registered group member will receive from the settlement. Group members will receive a pro-rated return apportioned against the total group member loss sum, depending on the value which their loss bears to the total group member loss. Returns will also be affected by the deduction of costs and funding commission approved by the Court.

Status of Settlement Approval

Following the conclusion of the Second Notice Regime, Gadens and JWS worked assiduously to ensure all registrations were accurately recorded, and the data from the registrants’ share trades extracted the data of all registered members

Due to the volume of registrations, the revised registrant data was provided to Gadens’ loss experts on 8 May 2020 for re-assessment of the registrants’ losses. The data and all proof of trade material provided by registrants has also been provided to the SurfStitch Deed Administrators, for the purposes of them calling for proofs and adjudicating losses under the DoCA. Unfortunately due to the volume of registrants, Gadens’ loss experts were not in a position to provide a revised loss report to us until 22 May 2020.

Throughout the months of April and May, the Plaintiffs were also preparing extensive evidence in response to the Cost Reports provided to the Court by the Court appointed referee in November/December 2019.

On 26 May 2020 the Plaintiffs’ new loss evidence and costs evidence and submissions were filed with the Court.

As a result of the delayed evidence, and due to limited availabilities between the parties’ Counsel between July and August, the settlement approval hearing listed before the Court on the 22 May 2020 has been adjourned to the 20 October 2020 (estimated duration of 2 days). At this stage, due to COVID-19 developments, an electronic hearing will be conducted.

The Plaintiffs are conferring with the parties to try to bring the Settlement Hearing date forward by agreement. We will confirm whether a revised hearing date is scheduled once and if the court makes such orders.

Once Settlement Approval is granted by the Court, settlement distribution will occur in accordance with the Amended Settlement Distribution Scheme approved by the Court, accessible here.

Should group members have any other queries or concerns in relation to your registration, please contact the Gadens Team via email at vic-surfstitch@gadens.com or call our office on

03 9252 2555. No further action by group members is necessary at this stage.

We will continue to provide group members with updates via our website and encourage registered members to periodically review this news feed.

Glenn McGowan QC

Partner & Chief Counsel

Rebecca Di Rago

Associate

vic-surfstitch@gadens.com

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

Continue Reading