Slater and Gordon Class Action

On 11 July 2017 the Australian Stock Exchange (ASX) was informed that there has been a conditional, in-principle settlement reached in Maurice Blackburn’s shareholder class action against Slater and Gordon (Hall Class Action). The announcement also stated that the proposed settlement will resolve any and all potential shareholder claims against Slater and Gordon and its directors and officers.
The proposed settlement is still to be documented and approval of the Federal Court. However, at this stage we do know that the proposal is that settlement of all shareholder claims will be effected by a shareholder creditors’ scheme of arrangement. 
The key features of the agreement are:
1.    A sum of $36.5 million will be available for shareholder claimants comprising:
        a.    $32.5 million from Slater and Gordon's insurers (the Insurer Settlement Contribution); and
        b.    $4 million from the hedge funds who now own nearly all the Slater and Gordon debt (the Senior Lender Contribution);

2.    The Senior Lender Contribution will be distributed only to class members in the Hall Class Action;

3.    the balance of the Insurer Settlement Contribution (after deduction of court-approved costs) will be available for distribution to all shareholder claimants through a separate Shareholder Creditors Scheme;

4.    Shareholder claimants will provide releases to Slater and Gordon, its directors and officers; 

5.    Shareholder claimants will be permitted to bring claims against third parties (such as auditors and advisors on the Quindell transaction) but only for their proportionate share of overall responsibility; and

6.    Shareholder claimants will be required to release third party claims which are not apportionable

Shareholder Creditors' Scheme of Arrangement
The Shareholder Creditors' Scheme will run in parallel to the settlement of the Hall Class Action and will operate to resolve all shareholder claims. The Shareholder Creditors' Scheme contemplates that shareholder claims will be submitted to and then accepted by the Scheme Managers (who will be appointed by agreement between the New Senior Lenders, Slater and Gordon, and Maurice Blackburn). 

The Shareholder Creditors' Scheme must be approved by a Court. If approved all shareholder claimants who submit proof of their claim will be evaluated by the Scheme Managers and, if the claim is accepted by the Scheme Manager, they will be entitled to a pro rata share of the $32.5 million paid by the insurers.
Formal notice of the settlement and further information about shareholders' options under the settlement will be distributed when they become available.
In light of the announcement and information regarding the in-principle settlement reached in the Hall Class Action and the proposed  Shareholder Creditors' Scheme we are not accepting further registrations for a proposed class action against Slater and Gordon.  
If you have questions please email us at or call us on (02) 9216 9898.