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.

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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

Case updates

The applicant filed the Third Further Amended Statement of Claim (3FASOC) on 22 December 2023 joining AXL’s insurer to the proceedings. We note that the insurance policy held by the former first respondent was entered into by DUAL on behalf of the four underwriters at Lloyds, who have been joined as the third to sixth respondents.

The third to sixth respondents filed their Defence to the 3FASOC on 16 February 2024 and the second respondent filed its Defence to the 3FASOC on 21 February 2024 (copies can be found in the “Key Documents” section).

Further, the second respondent filed its Further Amended Cross-Claim on 5 March 2024, with the third to sixth respondents filing their response on 18 March 2024 (copies can also be found in the “Key Documents” section).

In relation to the substantive proceedings, the applicant has filed and served both its expert evidence and proposed tender bundle, and there is a court-ordered timetable in place which will see the remaining evidence completed by 9 May 2024.

Justice Markovic has also made orders for the parties to prepare a joint list of common questions which will result in a more efficient trial. Orders have also recently been made providing for preparation for hearing, including orders for the parties to file submissions and prepare a Court Book.

The matter is listed for case management on 30 April 2024. The case remains provisionally listed for hearing in June 2024.

Opt Out Notice

Below is a link to the applicant’s Opt-Out Notice. The Federal Court has ordered that this Notice be published for the information of persons who are members of the class on whose behalf the action is brought and will be affected by the action. Those affected should read the Notice carefully. Group members may have already received a copy of this notice from Premier Litigation Funding Management Pty Limited.

Opt Out Notice

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