LONDON (ShareCast) - (Sharecast News) - Litigation Capital Management announced on Friday that the Federal Court of Australia has delivered its judgement in a class action funded by the company on behalf of shareholders in Quintis, a former operator of Indian sandalwood plantations in northern Australia.
The AIM-traded company said the court found that both a former director of Quintis and its auditors, Ernst & Young, engaged in "misleading and deceptive conduct" concerning the company's financial statements.

However, the judgment determined that LCM's funded party failed to establish that the misconduct caused them loss and damage, resulting in an unsuccessful claim.

LCM said it was reviewing the decision with its legal team and considering the merits of an appeal, which would need to be filed within 28 days of final orders being made.

The company said it invested AUD 13.2m (£6.67m) of its own capital into the case.

It confirmed that it has an insurance policy in place providing indemnity for any adverse costs associated with the claim.

"In this shareholder class action, our funded claim established misleading and deceptive conduct by the director and the auditors on the facts before the court," said chief executive officer Patrick Moloney.

"The case did not succeed in determining loss caused by this conduct and we are considering carefully with our legal team why this is the case.

"It is an unusual outcome that the court found that the financial statements in question were misleading, but that this did not result in loss for the shareholders in Quintis."

Moloney said the company's focus was now on assessing the judgment and determining the best course of action, alongside its legal team.

"We remain committed to our disciplined approach in managing risk and capital across our portfolio."

At 1157 GMT, shares in Litigation Capital Management were down 12.6% at 68p.

Reporting by Josh White for Sharecast.com.

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