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$250m class action filed against Shine Corporate
Shareholders have filed a class action against the ASX-listed personal injury firm.
Tom Lodewyke
Quinn Emanuel Urquhart & Sullivan (QE) announced today that it has filed a shareholder class action in the Supreme Court of Queensland against Shine Corporate Limited.
Shine attributed the revised guidance to poor first-half performance caused by “suboptimal fee-earner to file ratios and underperformance by some fee earners”, difficulty recovering work in progress, and market competition, especially in Queensland.
QE alleged that Shine misled investors in a series of representations regarding its FY14 and FY15 financial results, in breach of its disclosure obligations under the Corporations Act 2001 and ASX listing rules.
“QE contends that Shine knew or ought to have known, well prior to its trading halt in January 2016, that discrepancies in its work in progress (WIP) recovery rates, coupled with other related ‘business factors’, such as ‘suboptimal … fee earners’, ‘legislative reforms’ and ‘market competition’ would likely have a material impact on its FY 2016 results and accordingly, should have been disclosed to the market,” QE said in a statement.
Shareholders, who purchased Shine Corporate shares between 27 August 2014 and 29 January 2016, are eligible to register their interest in the class action.
QE partner Damian Scattini said the claim was an ironic reflection on Shine.
“Shine claims to be ‘always standing up for the little guy’,” he said.
“But its shareholders are the very ‘everyday Australians’ it claims to protect. It is ironic that a law firm, which claims to specialise in class actions, would mislead its own investors.”
Shine, in responding to the claim, said it has continuously met its disclosure obligations.
“Shine Corporate Ltd received notice of proceedings today in relation to a class action filed yesterday,” a spokesperson for the firm said.
“We are currently reviewing the documents that have been supplied and will respond to these proceedings in due course through the usual process.
“Shine Corporate Ltd has, at all times, met its continuous disclosure and compliance obligations and will be vigorously defending this matter.”
The claim will be funded by US-based litigation funder Regency Funding.
Shine’s WIP issues and the size of the claim echo the $250 million class action brought against Slater and Gordon by rival firm Maurice Blackburn, which looks set to settle for $36.5 million.
The troubles of Slater and Gordon and Shine Lawyers have fuelled the debate over listed law firms in recent times.
