A New South Wales Supreme Court judge has approved a $25 million settlement to finalise a years-long class action suit filed by former Dick Smith shareholders against the company’s former directors.
A number of former shareholders in 2017 took former Dick Smith directors Nicholas Abboud and Michael Potts to court, along with company auditor Deloitte, following the company’s collapse in 2016.
The class action suits were settled in principle on 3 December 2020 after years in the courts, with the defendants agreeing to pay $25 million.
NSW Supreme Court Justice James Stevenson approved the settlement this week, calling it a disappointing outcome for the shareholders.
“The figure of $25 million is a disappointing result for the group members as the total of the losses they contend has arisen from the conduct complained of is in the order of hundreds of millions of dollars,” the ruling read.
“However, I am persuaded that the inter partes settlement achieved is the best that could reasonably be expected and that the inter se settlement, although involving group members sharing only around 20 percent of the settlement sum, is in all the circumstances fair and reasonable.”
A large chunk of the settlement will be paid towards legal fees and other related costs, which come at a total of $19,912,125.
The remaining $5 million-plus will then be distributed to some 2700 former Dick Smith shareholders on a pro-rata basis.
Online retailer Kogan acquired some of Dick Smith’s intellectual property, customer and loyalty databases, and its Australian and New Zealand online stores in March 2016. Kogan continues to operate the Dick Smith sites as a separate entity to this day.