MG settled class action heads back to court

MG settled class action heads back to court

ADF News
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One of the class actions against Murray Goulburn over the fallout from its decision to unexpectedly cut milk prices and downgrade profit guidance in 2016 is scheduled to head back to the courts in December.

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One of the class actions against Murray Goulburn over the fallout from its decision to unexpectedly cut milk prices and downgrade profit guidance in 2016 is scheduled to head back to the courts in December.

The company announced in June it had settled the Endeavour River class action for $42 million.

But the Federal Court has declined to approved the settlement at this stage because of concerns about the commission being paid to the funder of the litigation.

The settlement proposed paying the funder IMG Bentham Ltd a commission of $13.47 million.

Justice Murphy said he was not persuaded that the settlement sum was fair and reasonable in the interests of class members.

He said although the commission rate fell within the standard rates, had been agreed to by the class members and the litigation could not have proceeded with the funding, he was concerned IMF had agreed to fund the proceeding relatively late in the day.

This had occurred after significant work had already been undertaken and after MG had already been penalised in an Australian Securities and Investments Commission prosecution over the matter.

But he decided to give IMF time to decide whether to file further evidence and submissions regarding the reasonableness of the commission.

A further case hearing is scheduled for December 6.

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MG announced on November 1 that a second class action, the Webster class action, had also been settled.

The settlement amounted to $35.7 million, was without admission of liability and is subject to Federal Court approval.

No date has yet been set for the hearing of the approval application.

Meanwhile the trial of the proceeding by ASIC against former managing director Gary Helou and former chief financial officer Brad Hingle, which was due to start in February 2020, but has been listed to start on September 28, 2020.

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