A group of Nufarm shareholders, super funds and banks, who launched two class actions over the company’s alleged failure to disclose company weaknesses three years ago, are expected to share $43.5 million as part of a proposed settlement.
In a statement released this morning, the law firms Maurice Blackburn and Slater & Gordon said an in-principle settlement had been reached with the agricultural supplies company after a mediation which was held yesterday.
The deal is subject to certain conditions, which at this stage have not been disclosed publicly. The deal must secure the approval of the Federal Court.
The class actions claimants accused Nufarm of failing the tell the stock exchange how worsening conditions in the market for herbicide glyphosate had affected its business and therefore its profitability and debt position.
Nufarm had denied the allegations.
The company’s chaiman, Donald McGauchie, said the board had considered the likely risks and potential costs of pursuing a defence at trial as well as the distraction it might cause to management.
“We are pleased to put this behind us and have the company fully focused on continuing to improve the operating performance of the business,” Mr McGauchie said.
In a statement to the stock exchange, Nufarm said the proposed settlement, which covers investors who bought shares between September 2009 to August 2010, encompasses claims made by the plaintiffs, accrued interest, the sums that will be paid to litigation funders for each of the class actions plus legal costs.
The class actions had been rolled into a single case and were due to be heard next year before Justice John Middleton in the Federal Court.
Maurice Blackburn lawyer Jason Geisker said the proposed settlement “represents a very positive and expeditious outcome for shareholders”.
Slater & Gordon’s Ben Phi said participants in the case included retail and institutional funds, individual shareholders and banks. Clients would be told about the deal in the next few weeks.
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