Masters class action abandoned

Litigator IMF Bentham is discontinuing funding for a class action over the demise of the Masters hardware chain.

Woolworths CEO Brad Banducci.

Woolworths looks to have dodged a costly and protracted shareholder class action lawsuit over the demise of its hardware chain Masters, after litigator IMF Bentham announced it was discontinuing the funding of a proposed case.

This could be the final chapter in the Masters saga which saw Woolworths retreat from the hardware sector. The experiment cost the company billions of dollars in writedowns, impairment charges and operating losses as well as distracting Woolworths management for years.

In an update to its shareholders yesterday, IMF Bentham said it expected to write off roughly $151,000, including capitalised internal overheads, relating to the abandoned action.

“IMF … considers that the proposed class action no longer meets its investment criteria and has accordingly decided not to proceed with funding the claims.”

It will be welcome news to the Woolworths board and chief executive Brad Banducci, who can now focus on improving the group’s flagship Australian supermarkets arm and resuscitating earnings at its struggling Big W chain.

IMF is a very experienced litigator, boasting a 91 per cent success rate in 162 completed cases as of June 30 last year.

Woolworths abandoned disastrous Masters chain in 2016, with the hardware retailer never making a profit.

In fact, its losses grew from year to year — and it booked a $1.9 billion writedown on the closed chain that caused Woolworths to record its first loss in 20 years.