Woolworths evades final nail in Masters coffin as IMF Bentham discontinues funding of lawsuit
IMF Bentham has downed tools on funding a class-action lawsuit against Woolworths over the demise of Masters.
Woolworths looks to have dodged a bullet in the form of 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 court action against the supermarket chain.
The snuffing out of the possible class action lawsuit could be the final chapter in the Masters saga which saw Woolworths (WOW) forced to retreat from its push into the hardware sector that cost the company billions of dollars in writedowns, impairment charges, operating losses as well as distracting Woolworths management for years.
In an update to its own shareholders this morning, IMF Bentham said it would no longer fund a potential court action against Woolworths on behalf of shareholders and expected to write off roughly $151,000, including capitalised internal overheads, relating to this matter.
“IMF announces that, after careful deliberation and further investigation, it 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 fully focus on continuing to improve its flagship Australian supermarkets arm and resuscitating earnings at its struggling Big W chain.
IMF is a highly experienced litigator, delivering as at June 30 2017 a 91 per cent success rate across 162 completed cases.
Woolworths called it quits on its 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.
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