Maurice Blackburn cracks open fresh case against Treasury Wine Estates
5 February 2020, Written by Matt Ogg
Class action law firm Maurice Blackburn has uncorked another investigation into Treasury Wine Estates (ASX: TWE), after poor US performance prompted a drastic cut to the company's FY20 forecast.
The move follows a successful class action against the Melbourne-headquartered vintner in 2017 that led to a $49 million settlment for shareholders.
Maurice Blackburn class actions Principal Miranda Nagy conducted that case, and has now raised questions about TWE's disclosure culture after it recently cut its earnings growth forecast from 15-20 per cent down to 5-10 per cent.
As a result the share price tanked 20 per cent over two days.
Treasury Wine Estates attributed the downgrade to unexpected company leadership changes and price undercutting in the US, combined with a higher cost of goods sold (COGS). This led to a 26 per cent year-on-year drop in earnings to $98.3 million for the Americas division in the first half.
Maurice Blackburn is investigating whether a corrective disclosure should have been made sooner than 28 January 2020.
"Like this recent announcement, the earlier class action we ran against Treasury also concerned an alleged failure to disclose serious problems in the Americas, particularly in Treasury's Commercial wine," says Nagy.
"We are investigating whether the facts are connected and whether has Treasury learned its lessons from the past.
Shareholders who purchased Treasury shares from 14 February 2019 to 28 January 2020 are eligible to register interest with the law firm.
"Treasury shareholders would naturally have expected a high standard from the company after the events that prompted the last class action," says Nagy.
"If Treasury has breached continuous disclosure laws, we will be looking to take action to assist investors once again to obtain financial redress for their losses."
TWE shares were up 1.01 per cent at $12.505 10:37am AEDT.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg