Surfstitch moves one step closer to settling class action
Embattled online retailer Surfstitch is one step closer to settling a shareholder class action out of court, Internet Retailing has learned.
At a scheduled appearance in Queensland’s Supreme Court today, lawyers for the online retailer and Quinn Emanuel, the law firm representing shareholders, informed the court they wished to explore an alternative dispute resolution.
This will see lawyers for both parties discussing a settlement to resolve the matter out of court.
According to a statement Quinn Emanuel partner Damian Scattini gave at the time the class action was filed on 23 May, the claim is valued at around $100 million.
But speaking to Internet Retailing today, Scattini declined to say whether negotiations would start or end at this figure.
“We’re all experienced in these things…the defendant’s lawyers are experienced. We’ll see if we can’t find something we can both agree on,” he said.
Scattini revealed that Surfstitch has provided some documents related to shareholders’ allegation that the ASX-listed company made misleading or deceptive statements to the market, but said he will not be pressing for further documents at this stage because “it’s in everyone’s interests to minimise costs as much as possible.”
According to Mark Humphery-Jenner, an associate professor in the school of banking and finance at UNSW Business School, an out-of-court settlement is desirable for retailers, since they may end up paying less in damages and preserving their reputation. From the shareholder’s perspective, it saves time and effort.
“It’s difficult to give a specific answer about whether an ADR [alternative dispute resolution] is rare or not in Australia, because it depends on the type of ADR. But settlements, particularly in the US, are quite common,” Humphery-Jenner said.
Surfstitch and Quinn Emanuel are due back in court on 18 July at 9:15 to say whether they have reached an agreement.