Centro Retail Australia (CRF) will pay $85 million as part of a $200 million class-action settlement that was announced in Melbourne’s Federal Court.
The deal provides a payout to shareholders who acquired securities in what was then Centro Properties Group (now CNPR) and Centro Retail Group (formerly CER) in 2007 and early 2008. Centro as well as PricewaterhouseCoopers (Centro’s auditor during the period) were sued for not disclosing the company was at least $3 billion deep in debt at the time shareholders bought these securities.
The settlement comes after almost four years of class action when the case went to trial in March and more than 30 lay and expert witnesses were called to give evidence at the trial. The trail revealed that Centro had failed to disclose the financial risk to wish investors were entering into.
“The settlement of the proceedings is a commercial division taken to allow the company to put this matter behind it and continue its focus on adding value for its investors without the distraction and expense of a continuing trial and any subsequent appeals,” CRF chairman Bob Edgar said.