Case Spotlight: Macmahon – Why it is important to register by the court-mandated deadlines in Australia
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CASE BACKGROUND
Macmahon Holding Limited, an Australian mining and construction company, engaged in misleading representations of its financial performance and processes by which it selected projects for which to tender. They failed to disclose a key risk concerning the project known as ‘Hope Downs 4 – Rail Earthworks and Bridge Construction’.
Law firm ACA Lawyers and global litigation funder Harbour Fund II, LP, advised by Harbour Litigation Funding Ltd. investigated the shareholder class action against Macmahon claiming a breach of continuous disclosure obligations and misleading and deceptive conduct.
Macmahon shareholders who were eligible to participate in the claim acquired Macmahon shares between 22 May 2012 and 18 September 2012.
GLOBAL GROUP LITIGATION FILING PROCESS
In contemplation of mediation, the Court set a registration deadline of 24 August 2018 in Australia. If eligible for any settlement amount at the conclusion of this case, shareholders must have executed a funding agreement with the organizers prior to that date.
Investors who registered prior to the deadline are now entitled to a share of the settlement funds. However, as this was an “open” or “opt-out” class action, investors who fit the class description but did not either register or opt-out by the deadline, are not only precluded from receiving any portion of the settlement, but they can no longer pursue any recourse for the damages they incurred.
CONCLUSION
This case is a prime example of the importance of registering by the court-mandated deadlines in Australia. The Macmahon case, which closed for registration on 24 August 2018, issued a Notice of Proposed Settlement on 22 October 2018 confirming that those investors who did not register by the deadline are bound by the Court’s decision, but will not be entitled to a share of the settlement.
FRT recommends that investors monitor and file in all shareholder class actions in Australia prior to the court-mandated registration deadlines. While notices are typically sent to shareholders prior to the deadline, if you purchased through a proxy, you may not receive notice of these types of deadlines. Implementing a comprehensive shareholder litigation monitoring service will prevent you from missing deadlines and significant recovery opportunities in these global matters.
Learn More
For more information on this case or FRT Global Group Litigation, please contact us at learnmore@frtservices.com.
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