Freedom Foods Group

Freedom Foods Class Action

This is a class action against Freedom Foods Group Limited (Freedom) and Deloitte Touche Tohmatsu (Deloitte) (collectively, the Respondents). 

Freedom shareholders who acquired shares in Freedom during the Relevant Period of 7 December 2014 to 24 June 2020 may be entitled to compensation for losses arising out of the Respondent’s alleged breaches of federal and/or state statutes. 

The class action is being funded and run as a management investment scheme (the Scheme) in compliance with new funded class action regulations introduced by the Australian government 2020. 

The class action is being run by law firm Phi Finney McDonald and has a deadline of 31 October 2022 for the submission of application documentation.

Background

On 30 November 2020, Freedom announced that it had restated a number of prior year accounts following an investigation into certain accounting practices. The original prior year accounts showed that Freedom generated a profit each year during the Relevant Period.  The restated accounts show that Freedom generated significant losses.  

Relevant Period means:

1. subject to paragraph (b) below, the period commencing on 7 December 2014 to 24 June 2020 inclusive; or
2. such other period or periods as determined by the Lawyers and approved in writing by the Funder, from time to time.

Causes of Action

Broadly, the Class Action is alleging that over the last 6 years management of Freedom capitalised certain day-to-day and other expenses that ought to have been immediately expensed, and failed to write off quantities of expired or obsolete inventory. 

These accounting errors had the effect of significantly overstating the financial position and performance of Freedom in the annual and half yearly reports of Freedom.

It also alleged that Freedom’s longstanding auditor Deloitte Touche Tohmatsu (Deloitte) failed to correct these accounting errors in their conduct of the audit of Freedom’s annual and half yearly reports. 

How much will it cost to be part of the class action?

The costs of running the Class Action will be partly met by Omni Bridgeway.  In return, the Omni Bridgeway will be entitled to a share of any amount awarded or settled in relation to the Class Action - see the definition in the Dictionary at the back of the Product Disclosure Statement.  
 
The amounts payable to Omni Bridgeway and the lawyers cannot exceed the amount recovered as part of the class action. 

If you elect to take advantage of the funding offered by Omni Bridgeway you will need to be comfortable with the relationship between the Scheme’s responsible entity, Omni Bridgeway, and the lawyers.

How can affected group members participate in the class action?

If you are an eligible affected group member, you can apply to be a member of the Scheme and to participate in the class action by completing and returning the Application Form which is set out in the Freedom Foods Class Action Product Disclosure Statement.

If your application to become a member of the Scheme is accepted, you will be able to access updates about the progress of litigation on this website with unique log on details that will be issued to you once your application to become a member of the Scheme has been accepted.

Please note that registering an expression of interest with Omni Bridgeway does not represent an offer to participate in a Litigation Funding Scheme and is not a commitment by any person to fund a class action or potential class action in respect of the matters set out on this website. Omni Bridgeway also notes the following:

• Any offer to retail claimants to participate in a Litigation Funding Scheme shall only be done by way of a Product Disclosure Statement in respect of the Freedom Foods Group Litigation Funding Scheme (ARSN 646 754 378) dated 18 February 2021 and issued by Omni Bridgeway Investment Management Limited (ACN 642 086 593, AFSL No. 524023);
• By registering an interest in participating in funded litigation, you consent to the Scheme’s Responsible Entity, Omni Bridgeway Investment Management Limited or Omni Bridgeway Limited (Authorised Representative of Omni Bridgeway Investment Management Limited) (ABN 45 067 298 088, Authorised Representative No 1283703) contacting you and providing further information in relation to litigation funding.
• To the extent that a Product Disclosure Statement (PDS) is made available, you should consider with or without the assistance of your professional advisers whether or not to participate in the litigation to which the PDS relates.

If you have any queries or if you would like to request a copy of the Constitution, you can contact the Omni Bridgeway Client Liaison Team by email [email protected] or free call 1800 016 464.

Notices

20 July 2022 - On 16 June 2022 the Full Court of the Federal Court of Australia delivered judgment in LCM Funding Pty Ltd v Stanwell Corporation Limited [2022] FCAFC 103. The Court decided that a litigation funding scheme is not a managed investment scheme.

OBIML is considering the impact of the judgment on the managed investment scheme that has been registered in respect of this class action and will provide a further notice to scheme members and prospective scheme members.