Successful resolution of Discovery Metals shareholder class action against KPMG
Piper Alderman acted in class action proceedings (funded by LCM Litigation Funding Pty Ltd) brought on behalf of shareholders in Discovery Metals Limited against KPMG Advisory Services (Australia) Pty Ltd.
The proceedings alleged negligence and breaches of the Corporations Act in respect of the content of an independent expert valuation report prepared by KPMG in the context of a takeover offer for all the shares in the Company. The takeover offer valued the company at $890 million AUD.
The KPMG valuation report was relied on by the directors of Discovery Metals in recommending to shareholders not to accept the takeover offer. Shortly after the bid lapsed, Discovery Metals went into liquidation after the takeover did not proceed. The claim alleged that because of the defendant’s actions, the shareholders did not accept the offer or otherwise sell their shares on the open market, and the shares then became worthless on liquidation.
The matter settled at mediation days before the three week hearing was due to commence.