Gadens’ NSW SurfStitch suit aims to maximise payout

BURLEIGH Heads-based online retailer SurfStitch has been hit by a second open class action from Melbourne-based law firm Gadens.

The lawsuit was first floated a year ago after $500 million was wiped from the company’s market value following profit downgrades.

SurfStitch and former chief executive Justin Cameron were named as defendants in the action, which was filed in the NSW Supreme Court on Wednesday. successive

Gadens said the lawsuit sought to recover shareholders’ losses from when the share price plummeted from a peak of $2.13 to 11¢ last year.

“The claim alleges that the downgrades came too late and should have been issued in 2015 when it was clear the company would be unlikely to meet the optimistic forecasts then in place,” Gadens said.

The lead plaintiff is listed as family trustee company T.W. McConnell Pty Ltd, linked to Sydney residents Helen and Ralph McConnell. Gadens said the action was designed to “catch shareholders most hurt by the alleged misconduct” and ensure maximum damages under NSW law.

SurfStitch said it covered the same allegations as the Quinn Emanuel action in the Supreme Court of Queensland and was considering whether it was an abuse of process.

The company said it was exploring settlement of the $100 million Quinn Emanuel claim, which was lodged last month.