The Centro Settlement

A $200 million landmark settlement was agreed to in May 2012 after Centro Group Shareholders commenced proceedings in the largest and most complex class-action in Australian history against Centro Group, property owners, and the company auditors, PriceWaterhouseCoopers.

A investigation into the facts finds that in 2007 the groups’ shares fell by over 90% shortly after it was revealed there was a failure to disclose the full $2 billion extent of short-term debt. Since then shareholders have sought somewhere to point the blame for the demise, bringing a multitude of cross-claims between Centro Group and PriceWaterhouseCoopers.

The proposed settlement will bring an end to the lengthy dispute over the directors’ breach of duty and PriceWaterhouseCoopers’s oversight, but must first be explained to the 6000 plaintiffs and found fair and reasonable by the court. It is hoped settlement of the civil suit will improve the precautions taken by directors and auditors to ensure accounts are indeed scrutinised.

Unfortunately as the case will not be decided at court important principles of Corporation law will not be tested or set precedent and advanced calculations of shareholder losses will be unnecessary. The Centro case has provided an important development for shareholder class-actions but settlement has left the law uncertain and undeveloped.

Owen Hodge Lawyers has many years experience in dealing with commercial law and have worked on behalf of many large corporations successfully. If you have any further questions about corporations’ law or civil claims, please contact Owen Hodge Lawyers on 9570 7844.

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The Centro Settlement

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