Introduction
Over the past four years, Hicksons’ Commercial Dispute Resolution team, led by Consultant,
Chris Moore and Partner,
Chloe Ellis, has successfully represented a significant proportion of bondholders in the
Axsesstoday Limited class action.
We are pleased to announce that the matter has recently reached a favourable settlement.
The Settlement Approval Judgment of Justice Lee, dated 27 May 2024 noted
‘I am grateful for the economical and efficient way in which the settlement approval application has been prepared… It has enabled me to deal with this application efficiently and is a model for the way in which such applications ought to be conducted.’
Furthermore, the Settlement Approval Judgment of Justice Markovic, dated 15 August 2024 mentioned
‘the legal costs were appropriate and proportionate given the level of complexity of the proceeding and that it had run to settlement over a period of four years.’
This recognition reflects our commitment to delivering top-tier legal services in a cost effective way and achieving outstanding results for our clients.
A summary of the matter is included below. Additional information on the class action can be
found here.
Background: Axsesstoday Limited
Axsesstoday Limited
(AXL) was founded in 2012 as a lender to small and medium-sized enterprises, and was listed on the Australian Stock Exchange.
In June and July 2018, AXL issued $55 million in corporate bonds under an Offer Specific Prospectus.
However, after the bonds were issued, AXL breached banking covenants due to the implementation of a new Australian Accounting Standard (AASB9), which affected the recognition of arrears.
This breach led to the appointment of administrators in April 2019.
Federal Court Proceedings
On 20 August 2020, Hicksons filed a class action in the Federal Court of Australia on behalf of a group of bondholders, each of whom signed a litigation funding agreement with Therium Litigation Finance Atlas AFP IC, and a Retainer Agreement with Hicksons.
The Representative Applicant was Compumod Investments Pty Ltd, acting as trustee of a staff superannuation fund.
The lawsuit was filed against AXL and PricewaterhouseCoopers Securities Limited
(PwCS), seeking recovery of the unpaid Bonds and interest.
The claim alleged that there were significant shortcomings in the prospectus documentation put forward by AXL and that PwCS, as the accounting advisor for the prospectus, was involved in AXL’s breaches and therefore also legally responsible for the bondholders’ losses.
Outcome
On 27 May 2024, Justice Lee approved a settlement between the applicant and four underwriters at Lloyds (under an insurance policy held by AXL). As AXL was deregistered, recourse was only available to the proceeds of its insurance cover.
This was followed by a settlement with PwCS shortly before 17 June 2024, on the eve of an expensive trial, which was avoided.
The matter is a great example of a case involving a defective prospectus and the liabilities of those involved in its preparation.
Congratulations to the team for their dedication and work throughout this matter!
More information on the class action can be
found here.
Should you require any assistance with class actions, commercial litigation and dispute resolution matters, please contact Consultant,
Chris Moore, Partner,
Chloe Ellis, or view the
Commercial Dispute Resolution page.