The proceeding, filed by Phi Finney McDonald on Tuesday afternoon, is being prepared on behalf of security holders who acquired an interest in Lendlease’s stapled securities or American Depositary Receipts between October 17, 2017 and February 25 this year.

Lendlease (LLC) told the ASX this morning that it denies any liability and would vigorously defend the class action.

The class action by Phi Finney McDonald follows the filing of a similar class action in April by Maurice Blackburn, which covers the same group over the same period, however the latest class action has attracted support from a number of Lendlease’s institutional investors including public pension fund Teacher Retirement System of Texas.

“We are aware of the existing class action but chose to join the Phi Finney McDonald and Therium group instead because, in our estimation, the innovative funding structure offered will result in lower funding commissions and higher net recoveries, which ultimately benefit our members,” Texas TRS assistant general counsel Lane Arnold said.

The company is expected to argue that it should only face one class action.

Phi Finney McDonald alleges that Lendlease violated its continuous disclosure obligations by failing to inform the market of the ongoing issues within its engineering division prior to announcing a “significant underperformance” and a $350m provision of the business on November 9 last year.

That triggered a 27 per cent plunge in the company’s shareprice in the three days of trade that followed, from around $17.50 a share, with analysts expressing “surprise” and “disappointment” at the scope of the segment’s underperformance and the consequent impairment, Phi Finney McDonald said.

At 11am (AEST) on Thursday, Lendlease shares were down 1.5 per cent at $13.66 each.

In February, Lendlease released its half-year results, revealing additional costs arising from the underperformance in the engineering division.

The class action alleges that Lendlease engaged in misleading or deceptive conduct in telling the market that certain financial markers would be achieved, and by representing that it was in compliance with its continuous disclosure obligations.

The suit is seeking to recover some of the losses suffered by shareholders due to Lendlease’s alleged conduct.

“For more than a year, Lendlease had reassured investors that the storm was over, when in fact the worst was yet to come,” said Phi Finney McDonald managing director Ben Phi.

“Our clients allege that Lendlease failed to keep them properly informed of the problems, and their gravity, over a prolonged period.”

The news comes after the government severed ties with Lendlease on the $729 million Allianz Stadium redevelopment late last month over a cost blowout.