Just two weeks before the epic class action over Centro Properties’ 2007 accounting fiasco was due to begin, the Federal Court has heard the newly formed group will argue it is not liable for any potential payout.
The revelation comes as the lawyer for Centro’s former auditors, PricewaterhouseCoopers, asked whether Centro Retail Australia (CRA), the newly formed entity for the Centro Group, would “stand in the shoes” of the former organization and assume its liabilities.
Justice Michelle Gordon pressed the counsel for CRA, Norman O’Bryan SC, and was told it was “highly likely” the CRA would argue it is excluded from certain liabilities, The Sydney Morning Herald reports today.
The revelation comes at the eve of the trial, in which Centro shareholders are seeking more than $200 million over the property group’s failure to disclose as much as $3.1 billion of short-term debt in 2007.
Two sets of shareholders, represented by Maurice Blackburn lawyers and Slater & Gordon, are suing the old Centro Properties group, and Centro Retail, and the former auditors PricewaterhouseCoopers, over the events.
Maurice Blackburn lawyer Michael Lee SC, counsel for the Centro investors, said CRA’s proposed defence was “a matter of potentially extraordinary significance”. He said it would impact any future judgment that could be made against an entity that would have no assets.
Lee said the defence had not be disclosed to the court during the approval process on the restructure of Centro.