Slater and Gordon has reached a $50 million settlement on behalf of shareholders of collapsed former education and training provider Vocation Limited.
The class action was brought against the company’s former auditors PricewaterhouseCoopers, its former Chair, former CEO and former CFO as well as Vocation Ltd (in liquidation) itself.
It was conducted jointly by Slater and Gordon with Maurice Blackburn, after each firm commenced separate actions in 2015.
Vocation listed on the ASX in November 2013 as one of Australia’s largest providers of vocational training and education services.
Less than a year after listing, in October 2014, the company announced that, following a Victorian government review of its training services, it had agreed to return some $19.6m of government funding and relinquish its associated funding contracts going forward. The share price collapsed and the company entered into voluntary liquidation shortly thereafter.
In the class action, it was alleged that the company’s auditors, PricewaterhouseCoopers, were liable to shareholders for misleading statements made in connection with their audit of the company’s financial reports in mid-2014, while the Victorian government’s review was already underway.
It was also alleged that Vocation had made misleading or deceptive statements in its initial public offer documents, and that its former directors and officers had made misleading public statements about the company once it was listed.
The settlement was negotiated on behalf of those who acquired shares in Vocation Ltd between 27 November 2013, and 4 December 2014. The settlement is subject to Court approval and a hearing for this purpose is expected to occur early next year.
Slater and Gordon Practice Group Leader Andrew Paull said that, if the Court approves the settlement, there would be many hundreds of registrants who will receive compensation in the first half of next year.
“Often, when a company goes into liquidation, shareholders are left out in the cold. Even if they were misled, it can be difficult for them to recover any of their losses,” Mr Paull said.
“In this case, after a long and hard-fought battle, we are pleased to have been able to achieve a meaningful outcome for Vocation’s former shareholders.”
Slater and Gordon is funded in the class action by Omni Bridgeway.