Investment firm Blue Sky has settled a lawsuit involving the alleged illegal downloading of company data.
The firm, currently in receivership, says proceedings against Blue Sky Water Partners, Pinnacle Investment Management Group, Riparian Capital Partners (RCP) and former Blue Sky employees have been resolved on confidential terms.
Those proceedings relate to a lawsuit which saw three former Blue Sky directors banned from using proprietary information allegedly taken in a breach of confidence.
As reported by Agri Investor, the Federal Court banned former Blue Sky directors Michael Blakeney, Nick Waters and Patrick Hayden, as well as Pinnacle Investment Management CFO Alex Ihlenfeldt, from using documents downloaded by Waters while he was still employed by Blue Sky.
The Federal Court order also applied to RCP, a Brisbane-based company established by Hayden and Waters which invests in water, agriculture and food. It has received backing from Pinnacle Investment Management.
At the time that the suit was filed by Blue Sky on April 25, 2019, chairman Andrew Day said the proceedings were initiated to safeguard the company.
"The board determined that on the basis of what we have identified, it was necessary to initiate this action to protect valuable intellectual property on behalf of the company, its shareholders and our investment clients," says Day.
Following the court order Pinnacle Investment Partners said both Pinnacle and RCP intended to fight the allegations and the court order.
The settlement of the lawsuit against its former directors ties up another loose end for Blue Sky, currently in receivership and being managed by administrators.
The news was followed by the announcement of resignations from directors Andrew Day and John McDonald, effective 11 June.
Yesterday the company bid farewell to its latest CEO Joel Cann, with the company saying it no longer required a CEO.
The Brisbane outfit has been in dire straits since failing to meet its loan conditions with US heavyweight Oaktree Capital.
KordaMentha is the group's receiver and manager, while Pilot Partners has been appointed as voluntary administrator.
The receivership came after Oaktree decided to enforce its rights under the convertible note facility entered into by Blue Sky, with KordaMentha noting its appointment is necessary if Blue Sky is to maintain its investment teams, key clients and stabilise the operations and capital structure of the business.
In 2017, Blue Sky was one of Brisbane's top 25 listed companies with a market capitalisation of more than $500 million, but in March last year the group's fortunes turned after a research report from Glaucus in the US raised suspicions about "wildly exaggerated" fee assets under management.
At the time BLA shares were trading around the $11.50 mark, but as the share price plunged the fallout led to two board purges and the resignations of managing director Robert Shand, and chairman John Kain along with other board members.
Anticipation around rescue packages led to a slight rebound in the share price last year, but it was short lived and the stock continued its steady decline. BLA shares last traded at $0.185 on Friday.
This final trading level is around 10 per cent of the $1.87 per share conversion condition under the deal with Oaktree, which gave Blue Sky a $50 million lifeline in September last year.
A significant restructuring took place in the first half of FY19, including the closure of its hedge fund business, an exit from its retirement living portfolio and the sale of its residential development sites.
Despite these efforts to resurrect the balance sheet, Blue Sky reported an underlying net loss after tax of $25.7 million for the first half of FY19, down by $41.8 million from its profit at the end of 2017.
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