MACMAHON HOLDINGS LIMITED (ASX CODE: MAH) SHAREHOLDER CLASS ACTION FAQ
1. Who is running the investigation and litigation?
ACA Lawyers Pty Limited (“ACA Lawyers”) is an Australian law firm that focuses on commercial litigation. Further information about ACA Lawyers is available at www.acalawyers.com.au.
ACA Lawyers has been investigating Macmahon Holdings Limited’s (“Macmahon” ) alleged non-disclosure of material price sensitive information and possible misleading and deceptive conduct concerning one of its mining contracts in the Australian mining region of Hope Downs. It is alleged that Macmahon knew it would incur losses on the Hope Downs 4 Rail Earthworks and Bridge Construction Project (“HD4”) but this information was not disclosed to the market until 19 September 2012 when the company issued a profit downgrade forecast.
Information about this class action is also available at www.acaclassactions.com.au.
ACA Lawyers has sought and obtained proposed funding from Harbour Fund II, L.P. (“Harbour”), a $220 million fund managed by Harbour Litigation Funding Limited to fund the continuing investigation and any future class action. Harbour was one of the first litigation funders in the UK and has been funding large scale litigation across the globe since 2007. Further information about Harbour is available athttp://www.harbourlitigationfunding.com/.
2. Who can join the litigation?
The proposed class action against Macmahon is to be brought on behalf of all Macmahon shareholders (“Claimants”) who acquired Macmahon ordinary shares between 2 May 2012 and 18 September 2012 (“Claim Period”).
3. What is my claim worth?
The size of any claim will depend on the number of Macmahon shares you acquired during the Claim Period. The damages payable to you in the event the claim is successful is the difference between the price you paid for the shares and the price which they were sold or an amount being the difference between the price paid for the inflated shares and the price at which they would have been trading at the time they were acquired had the company disclosed the material information to the market.
As with most shareholder class actions, it is likely that we will ask an expert or experts to provide an opinion about the effect of the undisclosed information regarding HD4 on the daily share price of Macmahon. The amount of compensation claimed by class members under the share price inflation method of determining loss is usually calculated by reference to this type of expert evidence.
4. What will the claim cost?
The costs of investigation and legal proceedings will be funded by Harbour (subject to executing formal funding agreements and the litigation budget agreed between Harbour and ACA Lawyers). You will only pay legal costs if the claim is successful, and then only from any proceeds recovered from Macmahon. You will otherwise not have to pay any legal costs, and you will never have to pay anything out of pocket.
Harbour will be entitled to reimbursement of the expenses it has paid and a commission based on the amount you recover.
5. I only held a small number of Macmahon shares. Is it worthwhile joining the class action?
Even though your losses may be relatively small, it may still be worthwhile joining the class action. You will not be required to pay anything in the event of an unsuccessful outcome, subject to the terms of Harbour’s funding agreement. Secondly, the costs payable to Harbour and ACA Lawyers are only deducted from proceeds that may be recovered either by way of settlement or judgment. Your share of these costs is generally proportionate to the amount of your losses.
6. Will I ever have to pay anything ‘out of pocket’?
You will not be required to pay any out of pocket costs, and you will not have to pay any legal fees if the litigation is unsuccessful.
If you choose to sign Harbour’s funding agreement and become a group member in the class action, at law you cannot be held liable for any adverse costs orders or security for costs orders made in favour any defendants.
If the class action is successful, our legal fees and Harbour’s costs and commission will only be paid from the proceeds of that class action. In the unlikely event that legal costs exceed the proceeds recovered from Macmahon, your legal costs will be capped at the amount of any proceeds.
7. What will ACA Lawyers and Harbour receive?
A proportion of ACA Lawyers’ legal costs will be paid by Harbour in accordance with the Retainer and Terms of Engagement.
If the proceedings are successful or are settled, Harbour and ACA Lawyers will be repaid the costs that they have incurred. If the claim is settled after proceedings are commenced the Court must approve the legal costs to be paid as part of the settlement.
If the proceedings are determined by the Court in favour of the applicant the respondent will be ordered to pay the applicant’s costs. If the amount of those costs cannot be agreed the Court will determine those costs. If there is a gap between the costs Harbour has paid and the amount it recovers then Harbour will be paid this amount from the total recoveries.
Harbour will receive a commission based on a percentage of the amount recovered on the basis set out in the terms of Harbour’s funding agreement.
8. How long will any legal proceedings take?
The class action is likely to take anywhere between one and three years. A number of factors can influence the length of time proceedings may take including the complexity of the litigation and the conduct of the respondent to any class actions.
9. Will my personal information and shareholding details be confidential?
Your personal information will only be used for the purpose of the legal proceedings, or as required by the Court or by law. In any other circumstances, we will seek your consent before disclosing any of your personal information. We will not disclose any personal information to third parties, including other clients, except as may be necessary for the purposes of the legal proceedings. A more detailed privacy statement can be found in the terms of our retainer.
10. How much time will I have to spend on the legal proceedings?
Initially we will only require you to provide the information required to complete Harbour’s Funding Agreement and our Retainer. This information relates to your contact details and Macmahon shareholdings in the period from 2 May 2012 to 18 September 2012. In the event that we require any further information, this will be advised in writing.
11. What do I have to do to participate?
If you purchased Iluka shares during the Claim Period and wish to retain ACA Lawyers and have the legal costs of the class action funded by Harbour, you will need to sign and return our retainer and the Harbour funding agreement. If you do not already have these documents, If you do not already have these documents, please email us at firstname.lastname@example.org.
So if you wish to participate, please complete and sign both our retainer and the Harbour funding agreement and return them to us via email at email@example.com.
If you have any questions about the class action, please contact ACA Lawyers by telephone on (02) 9216 9898 or by email at firstname.lastname@example.org.