Phi Finney McDonald launches class action against LendLease
Written on the 9 August 2019 by Business News Australia
A second class action against property group Lendlease (ASX: LLC) has been launched by law firm Phi Finney McDonald.
It follows a similar class action brought by Maurice Blackburn in April and relates to LendLease's underperforming engineering division.
As alleged by Phi Finney McDonald, LendLease announced that it would need to write-off $350 million because of underperforming projects in its engineering division. This was despite previous assurances from LendLease that the division had been brought under control.
The company's share price dived 27 per cent in the three days following the announcement.
Following that, when LendLease disclosed additional problems in its engineering division in its half-year results its shares fell a further ten per cent over the following days.
Investors and Phi Finney McDonald will argue that LendLease breached its disclosure obligations by failing to inform the market of issues within its engineering division extending back to October 2017.
Phi Finney McDonald Managing Director, Ben Phi, says that the significant problems in LendLease's engineering division came as a shock to investors.
"For more than a year, LendLease had reassured investors that the storm was over, when in fact the worst was yet to come," says Phi.
"Our clients allege that LendLease failed to keep them properly informed of the problems, and their gravity, over a prolonged period."
The class action has attracted significant levels of support from institutional investors from Australia and abroad, including the Teacher Retirement System of Texas which has $220 billion in assets under management, and Therium Litigation Finance.
"Phi Finney McDonald is proud to, again, be driving innovation and competition in Australian class actions," says Phi.
"We aim to bring meritorious claims against deserving defendants and prosecute those claims to the highest standards, while ensuring that our clients and group members receive the maximum possible return."
In response, LendLease says that it denies liability and will "vigorously defend the proceedings".
Business News Australia
Author: Business News Australia