Woolworths shareholder class action loses funding
A possible class action lawsuit against Woolworths over a 2015 share dive incident has lost its financial backing.
Litigation funders, IMF Bentham, announced last week that it would no longer fund a previously announced possible class action against Woolworths on behalf of its shareholders.
In 2017, Maurice Blackburn Lawyers and IMF Bentham said they were investigating possible class action against Woolworths in regards to an incident that saw the company’s shares fall 13.7 per cent when it downgraded its 2015 financial year profits.
When the possible lawsuit was first announced in April 2017, Class Action Principal from Maurice Blackburn, Andrew Watson, said it was clear Woolworths had known it was significantly behind on its profit projections as early as October 2014 but continued to maintain its profit guidance until the publication of its half-year accounts in February 2015.
“When the profit guidance was revised down, Woolworths shares dropped to $4.66 or 13.7 per cent of their value in two days,” Watson said at the time.
A registration portal, which is currently offline, was established to collect the details of shareholders interested in what was described as possibly $100 million compensation.
Last week IMF Bentham said the class action no longer meets its investment criteria.
IMF stated it expects to write off approximately AUD $151, 000 related to the matter.
Woolworths has released a statement to the Australian Securities Exchange (ASX) saying it “notes the market announcement made by IMF Bentham yesterday evening”.