Phi Finney McDonald acts for Raffaele Webb, the Representative Applicant, on behalf of Group Members in the class action commenced in the Federal Court of Australia against ASX-listed GetSwift Limited (ASX:GSW) (GetSwift) and its managing director Joel Macdonald. The claim is on behalf of investors who acquired GetSwift securities between 24 February 2017 to 19 January 2018 (inclusive) (claim period) including via the company’s capital raisings in June and December 2017 or by acquiring shares on the ASX during the claim period (Group Members).
The class action is funded by Therium Litigation Finance A IC.
A conditional settlement agreement has been reached in the class action against GetSwift and Mr Macdonald (Respondents) in the Federal Court of Australia Proceeding NSD580 of 2018.
The settlement agreement was entered into on 13 July 2021 between Mr Webb, GetSwift, Mr Macdonald and GetSwift’s parent company, GetSwift Technologies Limited (GTL), without any admission of liability by the Respondents. A comprehensive deed of settlement was executed on 19 August 2021.
In 2020, GetSwift ceased trading on the Australian Securities Exchange following shareholder and Federal Court approval of a restructure under which GTL acquired all GetSwift shares. GTL is listed on the Canadian NEO stock exchange.
The settlement agreement is conditional upon approval of the settlement terms by the Federal Court (as required in accordance with section 33V of the Federal Court Act 1976 (Cth)).
Under the proposed settlement structure, the Respondents and GTL will pay the aggregate amount derived from the following settlement formula:
- A first settlement payment of AU$1.5m, to be paid in instalments as follows:
- a. AU$500,000 within 7 days of the date of execution of the Deed;
- b. AU$500,000 due by 7 October 2021; and
- c. AU$500,000 due by 7 January 2022.
- During the term of 3 years from the date of the parties executing a Deed of Settlement (“Fundraising Term”), settlement payments equalling 8% of any funds raised by GTL by way of capital raising, with each such amount to be paid within 6 weeks of the amount being collected by GTL.
- During the Fundraising Term, GTL is required to raise capital equivalent to 10% to 20% of its pre-raising market capitalisation at the point in time that:
- a. it first hits any of the following market capitalisation levels (in CAD):
- i. $100m;
- ii. $250m;
- iii. $400m; and
- b. the market capitalisation remains at the level in 3.a.i – iii (as applicable) on average for 4 weeks following the date it first hit that market capitalisation.
- a. it first hits any of the following market capitalisation levels (in CAD):
- In any of the three 12-month periods comprising the Fundraising Term, if no funds are raised by capital raising:
- a. the Respondents and/or GTL will be required to make a settlement payment equal to 5% of the GTL Group’s revenue from contracts with customers (“revenue”) during the 12-month period ending on the most recent quarterly reporting date prior to the conclusion of the relevant 12-month period (“revenue percentage”) within 4 weeks of expiry of the period; however
- b. if 4(a) applies in respect of the first year of the Fundraising Term, the required settlement payment under 4(a) will be not be payable until the conclusion of the second year of the Fundraising Term.
- Subject to paragraph 6 below, during any of the three 12-month periods comprising the Fundraising Term, for any capital raising undertaken by GTL where the amount of funds raised is less than 20% of GTL’s pre-raising market capitalisation, then:
- a. the Respondents and/or GTL will be required to make a settlement payment calculated on the same revenue percentage basis as paragraph 4 above within 4 weeks of expiry of the relevant 12-month period; however
- b. the amount payable will be discounted based on the amount of funds raised applying the following formula:
- i. the revenue percentage payable will be the percentage equivalent to 25% of the percentage amount by which the relevant capital raising is less than 20% of GTL’s market capitalisation; such that (by way of example);
- ii. if the capital raising is 10% of GTL’s market capitalisation, the revenue percentage payable is 2.5; whereas
- iii. if the capital raising is 15% of GTL’s market capitalisation, the revenue percentage payable is 1.25%.
- If GTL conducts more than one capital raising during any of the 3 twelve-month periods comprising the Fundraising Term, then for the purpose of the calculation of any revenue percentage settlement payment for that period, the two or more capital raisings will be treated as one capital raising. For instance, if:
- a. GTL conducted two capital raisings during a single 12-month period for amounts of 5% and 10% of GTL’s market capitalisation at the relevant times;
- b. GTL’s market capitalisation was CAD200m at the time of the first capital raising and CAD250m at the time of the second capital raising; and
- c. this resulted in raisings of CAD10m and CAD25m respectively; then
- d. the weighted average revenue payment would be calculated premised on the extent to which CAD35m (the combined amount raised) fell short of being 20% of CAD225m (the weighted average market capitalisation); and
- e. the relevant percentage per (d) would be about 15.5%, such that the revenue percentage payment for that 12-month period would be a single payment of about 1.11% of annual revenue.
- All payments are to be made in Australian dollars. The rate of exchange to be used in calculating the amount of currency equivalent in Australian dollars is the closing exchange rate reported in The Australian Financial Review on the preceding Business Day before payment is made.
Further information regarding the proposed settlement will be provided to Group Members in due course, including in relation to the Federal Court settlement approval process. Group Members who have any questions in the meantime may contact Phi Finney McDonald at firstname.lastname@example.org.
On 19 November 2021, the Court ordered that Group Members who previously registered to participate in the GetSwift Class Action during the Court ordered registration process on or before 22 November 2019 be deemed registered Group Members for the purposes of the Proposed Settlement.
Any Group Members who did not register their claims during the Court ordered registration process on or before 22 November, must now register in order to participate in the Proposed Settlement. Group Members must register by 4 February 2022 via the registration portal here.
More information can be found in the November 2021 Notice to Group Members, linked below.
- On 23 May 2018, the Court gave Phi Finney McDonald sole carriage of the class action, and permanently stayed two competing proceedings that had also been issued against GetSwift.
- On 7 February 2019, the Court ordered that Group Members who wished to opt out of the proceeding were required to do so by 28 March 2019 – see the February 2019 Notice to Group Members, linked below, for further details.
- On 1 October 2019, the Court ordered that Group Members who wished to potentially benefit from any settlement reached at a mediation held in early 2020 were required to register their claims by 22 November 2019. This process is described as “class closure” – see the October 2019 Notice to Group Members, linked below, for further details.
- The case did not settle at the mediation held in early 2020. The “class closure” period described in the October 2019 Notice therefore expired, and the proceeding was once again an open class action brought on behalf of all Group Members that have not opted out – see the May 2020 Notice to Group Members, linked below, for further details.
- The case was listed to commence trial on 20 September 2021, however given the Proposed Settlement, the trial date was vacated.
- On 19 November 2021, the Court ordered that Group Members who wished to benefit from the Proposed Settlement must register their claims by 4 February 2022 (if they did not previously register during the Court ordered registration on or before 22 November 2019) – see the November 2021 Notice to Group Members, linked below, for further details.
NOTICES TO GROUP MEMBERS
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