The Omni Bridgeway Ltd (ASX: OBL) share price fell today as the company announced the settlement of a class action case. As a result, shares in the dispute resolution finance company dropped to $3.54, down 5.6% on Friday's close.
In comparison, the All Ordinaries Index (ASX: XAO) dipped by only 0.05%.
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Wivenhoe Dam class action
Omni Bridgeway is involved as a litigation funder regarding the settlement of the Wivenhoe class action for an aggregate amount of $440 million. In essence, this means that the company provides funding for the claimants. In return, the company receives a proportion of the damages recovered.
The Wivenhoe dam case has been a hard fought and extremely expensive case on behalf of approximately 6,700 claimants. The defendants are state-owned enterprises Seqwater, Sunwater and the Queensland Government.
However, only the State of Queensland and Sunwater have settled their half of the liability in the class action. Seqwater is yet to settle, with its 50% of the $880 million damages going to court in May.
Class action resolution
Shares in the company dropped today after Omni Bridgeway announced the settlement of the Wivenhoe Class Action with the State of Queensland and Sunwater.
This morning the supreme court of New South Wales approved the terms of the settlement sought on behalf of the group members. The settlement is now unconditional, although appeals can still be made. Omni Bridgeway stated this is unlikely to happen.
Notably, the company will receive a fee from the settlement for $30 million. This is for project costs and the management fee.
Nonetheless, Omni Bridgeway's estimated total income for this investment may still change. This is both as a result of the non-settling respondent, Seqwater and the intricacies surrounding the settlement.
Regarding Seqwater, the company stated: "The 50% of the investment relating to the judgment against Seqwater remains unsettled and will continue to be carried as an intangible investment at cost pending future resolution."
About the Omni Bridgeway share price
Omni Bridgeway is a specialist in dispute resolution finance, with particular expertise in civil and common law legal and recovery systems. The company boasts operations spanning Asia, Australia, Canada, Europe, the Middle East, the UK and the US.
Shares in the mid-cap ASX listed stock have not had a good year, with the Omni Bridgeway share price falling by 20%.
