Shareholder action against Treasury Wine Estates Limited
We funded a shareholder class action against global wine producer Treasury Wine Estates Limited (TWE) following a significant write-down in 2013. It was alleged that the company caused loss and damage to affected shareholders by:
- failing to disclose material information about excess inventory held by the company’s US distributors during the Relevant Period for the claims (17 August 2012 to 15 July 2013). As a result, 18 million bottles of wine needed to be disposed of.
- failing to have a reasonable basis for guidance issued to the market during the Relevant Period concerning projected depletions (sales of TWE wine by distributors in excess of their purchases of TWE wine) and TWE's earnings growth rates for FY2013 and FY2014
- making misleading statements in relation to its US distributors' inventory levels, its expected financial performance for FY2013 and FY2014 and its compliance with the ASX Listing Rules, in the Relevant Period.
Proceedings were filed in the Federal Court (New South Wales Registry) in July 2014. The case was successfully resolved by the parties for A$49 million inclusive of costs and interest. The settlement was approved by the Federal Court in November 2017.