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TWE settles class action for $49m

Trevor Chappell  |  28 Aug 2017Text size  Decrease  Increase  |  

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MELBOURNE - [AAP] Wine supplier Treasury Wine Estates (ASX: TWE) has settled a shareholder class action brought against it for allegedly engaging in misleading and deceptive conduct, for $49 million.

In July 2014, Brian Jones and other TWE shareholders, represented by law firm Maurice Blackburn, launched Federal Court action against TWE for allegedly breaching disclosure obligations over writedowns incurred in 2013 to deal with excess, aged and deteriorating stock in the United States.

TWE said the $49 million settlement includes interest and costs, and is fully insured so it won't affect the company's financial results.

The settlement is without admission of liability.

"The agreement to settle was a commercial decision made in the best interests of TWE shareholders to enable the company to remain focused on executing against its strategy without the distraction and expense of the legal proceeding," TWE said in a statement on Monday.

TWE announced in July 2013 that it would destroy more than $35 million of aged and excess stock in the US and offer major discounts after admitting it overestimated the amount of wine needed to supply its US market.

The company also took other measures to address the oversupply.

TWE said at the time that all the measures taken would cost $160 million in 2012/13 and result in lower shipments to the US in fiscal 2014.

Disgruntled shareholders subsequently launched legal proceedings against TWE, claiming that TWE had breached its disclosure obligations.

A second class action commenced by Melbourne City Investments was permanently stayed as being an abuse of process.

TWE shares were 12 cents higher at $14.08 at 1222 AEST.

 

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