Mesoblast Shareholder Class Action

Mesoblast Shareholder Class Action

Omni Bridgeway is co-funding a shareholder class action against Mesoblast Limited (ASX:MSB) (Mesoblast) on behalf of persons (Group Members) who acquired Mesoblast shares or related securities between 22 February 2018 and 17 December 2020 inclusive. The Full Group Member definition is set out below.  

On 19 October 2022, the Federal Court ordered that two class actions against Mesoblast be consolidated into one set of consolidated proceedings known as Paul Tibor Horsky and Oil Surveillance Australia Pty Ltd ATF D.A Lynch Superfund v Mesoblast Limited (ACN 109 431 870) (VID268/2022) (Consolidated Class Action).

Omni Bridgeway is co-funding Phi Finney McDonald and William Roberts (the Lawyers) as joint solicitors on the record for the Consolidated Class Action alongside ICP Funding Pty Ltd and Investor Claim Partners Pty Ltd (together, ICP).

Background 

The Consolidated Class Action concerns Mesoblast’s public statements regarding potential applications of its product known as Remestemcel-L (R-L), which has been developed to treat inflammatory diseases.

The Consolidated Class Action concerns the following applications of R-L:

1. first, in respect of the treatment of paediatric patients suffering from steroid refractory acute Graft versus Host Disease (SR-aGVHD application); and
2. secondly, in respect of patients suffering from acute respiratory distress syndrome (ARDS) caused by COVID-19 (COVID-19 application).

Causes of Action

Broadly, the Consolidated Class Action alleges that Mesoblast contravened its continuous disclosure obligations and engaged in misleading or deceptive conduct throughout the Claim Period in relation to both the SR-aGVHD application and COVID-19 application of R-L.

Participants in the class action may be entitled to compensation for losses arising out of Mesoblast’s alleged breaches of its continuous disclosure obligations and/or by Mesoblast engaging in misleading and deceptive conduct.

Funding

The Consolidated Class Action is being partly funded as a registered management investment scheme named The Mesoblast Shareholder Litigation Funding Scheme (ARSN 656 547 586) (the Scheme).

A PDS was issued on 7 February 2022 in connection with the Scheme by Omni Bridgeway Investment Management Limited (ACN 642 086 593), the responsible entity for the Scheme. The PDS for the Scheme, as amended or supplemented from time to time, should be read in its entirety prior to applying to join the Scheme. Refer also to the Notices section below for updates to the information contained in the PDS. 

Will it cost anything to participate in the class action?

The costs of running the Consolidated Class Action will be partly met by Omni Bridgeway and ICP, with the remainder being met by the Lawyers. In return, Omni Bridgeway will be entitled to a share of any amount awarded or settled in relation to the class action - see the Fees and Other Costs section of the PDS.

The amounts payable to Omni Bridgeway and the lawyers cannot exceed the amount recovered as part of the class action.

There are no ‘out of pocket’ costs for class members to pay. Class members do not have to pay anything in the event that the class action is unsuccessful, as Omni Bridgeway and ICP agree to pay any legal costs that might be awarded to Mesoblast or any other respondents.

Who are the Group Members in the class action?

You are a Group Member in the class action, and eligible to apply to join the Scheme, if:

1. during the period from 22 February 2018 until the close of trading on 17 December 2020 inclusive (Claim Period) acquired:
   1. an interest in fully paid ordinary shares in Mesoblast listed as “MSB” on the Australian Securities Exchange;
   2. an interest in American Depository Receipts traded on the NASDAQ exchange under the symbol “MESO”;
   3. an interest in securities traded over the counter in the United States with the symbol “MEOBF”; and/or
   4. long exposure to MSB Shares by entering into equity swap confirmations in respect of MSB Share;
2. suffered loss and damage by or resulting from the alleged contravening conduct of the Respondent as described in the Statement of Claim; and
3. are not or were not during the Claim Period:
   1. a director or an officer or a close associate (as defined in s 9 of the Corporations Act 2001 (Cth) (Corporations Act)) of Mesoblast; or
   2. a related party (as defined in s 228 of the Corporations Act) of Mesoblast; or
   3. a related body corporate (as defined in s 50 of the Corporations Act) of Mesoblast; or
   4. an associated entity (as defined in s 50AAA of the Corporations Act) of Mesoblast; or
   5. a Justice, Registrar, District Registrar, or Deputy District Registrar of the High Court of Australia or the Federal Court of Australia; or
   6. an officer, employee, or legal practitioner engaged by Phi Finney McDonald in relation to the class action; or
   7. an expert or consultant engaged in relation to the class action.

How can Group Members sign up?

Group Members can apply to be a member of the Scheme and participate in the Consolidated Class Action with funding from Omni Bridgeway by completing and returning the Application Form which is set out in the PDS for the Scheme issued by Omni Bridgeway Investment Management Limited (ACN 642 086 593).  

A copy of the PDS can be accessed here and should be read in its entirety prior to submitting an application. Any offer to retail clients to participate in the Scheme shall only be done by way of the PDS.  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.

You may wish to register an expression of interest in respect of the Scheme to keep updated. However, please note, if you express 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.  Please also 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. 

If your application to become a member of Scheme is accepted, you will be able to access updates about the progress of the 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. 

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

Notice dated 17 November 2022 – Consolidation of Proceedings and Co-Funding Agreement The Mesoblast Shareholder Litigation Funding Scheme (ARSN 656 647 586) (Scheme). 

On 19 October 2022 the Federal Court ordered that two class actions being brought against Mesoblast Limited be consolidated into one set of proceedings known as Paul Tibor Horsky and Oil Surveillance Australia Pty Ltd ATF D.A Lynch Superfund v Mesoblast Limited (ACN 109 431 870) (VID268/2022).

The Federal Court has ordered that the class action being funded by Omni Bridgeway be consolidated with a competing class action that was filed by William Roberts Lawyers.
Omni Bridgeway will co-fund the consolidated proceedings with ICP, the funder of the William Roberts class action in accordance with Joint Funding Terms approved by the Court. 

A copy of the full notice can be viewed here.

Notice dated 23 June 2022 – The Mesoblast Shareholder Litigation Funding Scheme (ARSN 656 647 586) (Scheme) – Federal Court's Decision on Litigation Funding Schemes

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.

Omni Bridgeway Investment Management Limited (ACN 642 086 593 and AFSL No. 524023) (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.

OBIML does not anticipate that the decision has any impact on the class action itself, and OBIML expects the class action to continue progressing in the Federal Court.

Notice dated 3 June 2022 – Proceedings now filed – The Mesoblast Shareholder Litigation Funding Scheme (ARSN 656 547 586) (Scheme)

Omni Bridgeway Investment Management Limited (ACN 642 086 593 and AFSL No. 524023) (OBIML) gives notice that the proceedings for this open class action have now been filed in the Victorian Registry of the Federal Court of Australia, being Oil Surveillance Australia Pty Ltd ATF D.A Lynch Superfund v Mesoblast Limited (Proceeding No. VID303 of 2022).  

Notice dated 2 June 2022 – The Mesoblast Shareholder Litigation Funding Scheme (ARSN 656 647 586) (Scheme) - Filing of class action by William Roberts

Please note that the class action against Mesoblast Limited intended to be filed by William Roberts Lawyers, as noted in section 3 of the PDS, has now been filed in the Victorian Registry of the Federal Court of Australia (Paul Tibor Horskey v Mesoblast Limited (VID268/2022)). The proceedings have been commenced by Mr Horskey as a representative proceeding on behalf of persons who or which acquired an interest in Mesoblast ordinary shares, American Depositary Receipts that represent Mesoblast ordinary shares or equity swap confirmations in respect of Mesoblast ordinary shares during the period between 22 February 2018 and 17 December 2020 (William Roberts Class Action). The William Roberts Class Action is being funded by ICP Funding Pty Ltd under a managed investment scheme operated by CASL Governance Ltd.

The William Roberts Class Action is a related class action which is separate to the class action being funded by Omni Bridgeway and run by Phi Finney McDonald, and does not form part of the Scheme operated by Omni Bridgeway Investment Management Limited. As noted in section 3 of the PDS, group members who apply to join the Scheme being funded by Omni Bridgeway agree to opt out of any related class action, including the William Roberts Class Action, at the time of submitting their application to join the Scheme.

With the filing of a related class action there is a risk that all proceedings against Mesoblast Limited may be consolidated into one proceedings. Alternatively, the Court may stay one of the class actions which could result in either the William Roberts Class Action, or any class action against Mesoblast that is funded by Omni Bridgeway, being halted by order of the Court. 

Notice dated 12 May 2022 – Issue of Supplementary PDS – Important changes to Funder entitlements

Please note a Supplementary PDS dated 11 May 2022 has been issued by the responsible entity for the Scheme which makes important amendments to the PDS in respect of any entitlements the Funder may receive under the Scheme.  

These amendments mean that the funding commission that Omni Bridgeway will be entitled to receive in the event of a successful outcome in the proceeding will be calculated as a percentage of the net resolution sum, rather than as a percentage of the resolution sum in its entirety, as originally contemplated in the PDS. The “net resolution sum” is the amount of any compensation proceeds received (whether under any settlement or as a result of a Court award of damages) after the deduction of cost amounts, including legal costs, funded by Omni Bridgeway.

Please refer to the Supplementary PDS for further information.  The Supplementary PDS should be read in conjunction with the existing PDS, both of which are available using the links to the PDS on this page. 

 

A copy of the PDS can be accessed here.
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