IMF BRACES FOR BIG LOSS FOLLOWING WITHDRAWAL FROM SPOTLESS CLASS ACTION

IMF BRACES FOR BIG LOSS FOLLOWING WITHDRAWAL FROM SPOTLESS CLASS ACTION
LITIGATION fund IMF Bentham (ASX: IMF) is set to lose as much as half a million dollars after it ceases funding one of the major shareholder class actions it has been backing since February.

Pending the court's approval, IMF announced it will withdraw its funding of William Roberts Lawyers' class action against Spotless Group (ASX: SPO) on the grounds it has discovered new information which has compelled it to cease its financial support.

While the new information remains undisclosed, IMF will adjust its investment portfolio to reflect losses incurred by writing off the class action. It expects these losses will not exceed $510,000.

In February, William Roberts Lawyers became the first of two firms to officially launch a class action against Spotless, alleging that the company breached its continuous disclosure obligations to shareholders and engaged in misleading conduct.

At the time, Bill Petrovsky of William Roberts Lawyers said his firm would allege that the change of Spotless' accounting policy and the financial impact of this change were not properly disclosed.

"Spotless has allegedly modified an accounting policy, without disclosing the change in accordance with the accounting standards," said Petrovsky.

Slater and Gordon, backed financially by Therium Australia, became the second firm to launch a class action against Spotless on similar grounds.

At this stage, there is no indication that Slater and Gordon's case has been affected.

It is also not yet known whether William Roberts Lawyers will continue to pursue its own class action despite the withdrawal of funding from IMF.

Meanwhile, Spotless has released a statement to the ASX saying it welcomed the decision by IMF Bentham to discontinue its class action.

"The decision by IMF Bentham to cease funding the shareholder class action underscores Spotless' position that it has at all times been in compliance with its continuous disclosure obligations," the company says in an ASX statement.

Spotless also acknowledged the announcement yesterday by Downer EDI to waive all remaining defeating conditions to its current takeover offer for Spotless.

Downer says its offer price of $1.15 per Spotless share is final and will not be increased in the absence of a superior proposal.

The Spotless board has again stated it believes the Downer offer to be inadequate and has called on shareholders to reject the offer

Never miss a story: Sign up to Business News Australia's free news updates

Follow us on Twitter, Facebook, LinkedIn and Instagram

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Australian development giant Lendlease Group (ASX: LLC) has been gr...