As Maurice Blackburn welcomes the Federal Court's ruling against directors of Centro Properties Group yesterday (27 June), Freehills looks like it could also be drawn into the dispute.
Publicly-listed litigation funder IMF and Maurice Blackburn have announced they will lead an action on behalf of hundreds of investors seeking around $200 million in damages due to alleged deceptive conduct and breaches of continuous disclosure obligations by directors and former executives of Centro.
Freehills is also at risk of being drawn into the class actions because of merger advice it gave Centro in 2007. The firm was on the due-diligence committee overseeing the merger of the Centro Retail Trust with Centro Shopping America Trust.
As such, lawyers for Centro's auditors, PricewaterhouseCoopers, are considering making a cross-claim against Freehills and may ask permission to add extra parties before a hearing is set down for 9 August.
Lawyers Weekly contacted Freehills but the firm was unable to comment at this time.
It was not until early 2008 that Centro revealed it had understated its short-term liabilities by about $3 billion, after its share price plunged in 2007 when the market learned it was having difficulties refinancing its debt.
The class actions are not due to be heard until March 2012.