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 Andrew.Langham@plfmanagement.com.au or email Hicksons at email@example.com.
- Frequently asked Questions
- Originating Process filed 20 August 2020
- Statement of Claim filed 20 August 2020
The proceedings were listed for a Case Management Hearing before Justice Markovic in the Federal Court on 16 September 2020. The proceedings have been adjourned to a further Case Management Hearing on 29 October 2020. In the interim, the following matters will be attended to:
- the second defendant, PwCS, wishes to seek further and better particulars of the allegations set out in the Statement of Claim – dates have been agreed for the provision of those requests and the response;
- the position of the first defendant, AXL and its insurers is to be clarified.