Murray Goulburn has agreed to pay $42 million to settle class action on behalf of more than 1,300 investors hit when the milk processor unexpectedly cut milk prices and downgraded profit guidance in 2016.
Under the proposed agreement announced by law firm Slater and Gordon on Monday, Murray Goulburn Co-operative Co Limited entities will pay $42 million, inclusive of legal fees and interest, to settle the claims of class action group members.
The class action was commenced in August 2018, and was pursued on behalf of institutional and retail investors who acquired stakes in Murray Goulburn between May 29, 2015, and April 27, 2016.
The proposed settlement was reached ahead of a four-week trial, which was scheduled to start in February 2020.
Slater and Gordon said the settlement is subject to Federal Court approval, but that Murray Goulburn made no admission of liability under the terms of the settlement agreement.
Many suppliers quit the industry or switched to other processors after debt-laden Murray Goulburn slashed the price it paid farmers for their milk.
Murray Goulburn’s value subsequently collapsed and Canadian dairy giant Saputo completed a $1.3 billion purchase of the co-operative in May last year.