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Axsesstoday Limited Class Action

Background on Axsesstoday Limited

Axsesstoday Limited (AXL) was established in 2012 and operated as a lender to small to medium sized enterprises and was listed on the Australian Stock Exchange.
 
On 26 June 2018, AXL offered to issue $50 million in simple corporate bonds described as “Axsesstoday Bonds – Series A, tranche 1” pursuant to the terms of the Offer Specific Prospectus dated 26 June 2018 (Bonds). 
 
Several months after issue, AXL was found to be in breach of one or more banking covenants. The major cause of those breaches was the implementation of a new Australian Accounting Standard (AASB9) which, amongst other things, altered the requirements for the recognition of arrears, leading to a breach of the relevant arrears ratio.  The directors ultimately appointed administrators in April 2019.
 
A Deed of Company Arrangement was subsequently entered into, under which investors received a payment in the vicinity of 27 cents in the dollar, leaving a significant shortfall on their investment.

Federal Court Proceedings

On 20 August 2020 Hicksons filed a class action in the Federal Court of Australia on behalf of a significant proportion of the bondholders, each of whom have signed a litigation funding agreement with Therium Litigation Finance Atlas AFP IC and a Retainer Agreement with Hicksons. The Representative applicant is Compumod Investments Pty Ltd as trustee of a staff superannuation fund.
 
The proceedings were commenced against Axsesstoday Limited (AXL) and Pricewaterhouse Coopers Securities Limited (PwCS), seeking recovery of the shortfall on the Bonds and interest payments which were not made. PwCS was the accounting advisor in connection with the prospectus documentation, which is alleged to have contained significant shortcomings.
 
The applicant alleges, among other things, that AXL made misleading and deceptive statements in, and omitted information that was required to be disclosed in, its prospectus, contravening the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. It is further alleged that in providing accounting advice in relation to the prospectus, PwCS was involved in those contraventions, in addition to itself engaging in misleading or deceptive conduct.
 
Significantly, the information which ought to have been contained in the prospectus is information concerning the likely potential effect of AASB9 on the financial statements of AXL and its ability to comply with its banking covenants. 

Want to find out more?

Further information is contained in our FAQ. 

If you would like further information regarding the class action and whether you are eligible to register, please contact Premier Litigation Funding Management at [email protected] or email Hicksons at [email protected].

Key documents
  1. Frequently asked Questions 
  2. Originating Process filed 20 August 2020
  3. Statement of Claim filed 20 August 2020
  4. Amended Statement of Claim filed 20 September 2021
  5. First Respondent’s Defence to the Amended Statement of Claim filed 23 November 2021
  6. Second Respondent’s Defence to the Amended Statement of Claim filed 24 November 2021
  7. Second Respondent’s Notice of Cross-Claim filed on 24 November 2021
  8. Second Respondent’s Statement of Cross-Claim filed on 24 November 2021
  9. Applicant’s Reply to the First Respondent’s Defence to the Amended Statement of Claim filed 13 December 2021
  10. First Respondent’s defence to PWCs Cross-Claim filed on 24 December 2021
  11. PWC’s reply to defence to the Cross-Claim filed on 18 February 2022
Case updates
 

The matter was listed for a Case Management Hearing on 1 April 2022 and the Court made further timetable orders on 7 April 2022.
 
The first respondent and applicant are to give discovery by 13 May 2022 and for inspection to take place by 3 June 2022.
 
The applicant and the second respondent have been unable to agree on an approach to discovery and categories of documents to be discovered by the second respondent. In the circumstances, the Court made orders for the applicant to file any application for discovery by 19 April 2022. That application will be listed for directions on 30 May 2022.
 
The resolution of the discovery issues is a critical aspect of the case.
 
The applicant is also seeking to make further amendments to the statement of claim to include reference to the Replacement Offer Specific Prospectus. The parties are in discussions in relation to the filing of a further amended statement of claim. If the parties are unable to agree, the applicant is to file any application by 19 April 2022 and the application is to be listed for hearing 30 May 2022.
 
The application has been listed for a case management hearing on 30 May 2022.

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