In late 2013, various groups of shareholders commenced legal action seeking to recover losses sustained as a result of their purchase of shares in HIH Insurance Limited.
Judgment in respect of those proceedings was handed down by the NSW Supreme Court in April 2016.
The Court found that the successful plaintiffs who purchased shares in HIH Insurance Limited on or after 25th August 1999 were entitled to claim damages for losses suffered, because the share price was over-valued at the rates and in the time frames set out below. Those damages claims were to be admitted in the HIH Insurance Limited liquidation and the HIH Casualty & General Insurance Limited and FAI General Insurance Company Limited Schemes of Arrangement.
• 6.25% of price if purchased between 25th August 1999 and 2nd March 2000;
• 9.5% of price if purchased between 3rd March 2000 and 17th October 2000; and
• 13% of price if purchased from 18th October 2000 onwards.
In the further reasons for judgment delivered on the 10th March 2017, amongst other issues, the Supreme Court determined that any subsequent sale of shares purchased on or after 25th August 1999 should be taken into account in determining the quantum of damages suffered.
Following the handing down of the judgment, dividend payments were made to the successful plaintiffs in September 2017.
The Liquidators are currently seeking Supreme Court directions on the implications the judgment may have on all remaining shareholders of HIH Insurance Limited.