UK law firm Leigh Day serves class action against Link over $6.5b Woodford collapse

UK law firm Leigh Day serves class action against Link over $6.5b Woodford collapse

With its UK subsidiary as trustee, Link Group Administration Holdings (ASX: LNK) has been embroiled in the collapse of investment guru Neil Woodford's eponymous equity income fund; an issue that ultimately cost the Australian business a takeover from Canada's Dye & Durham.

After failing in its bid to launch a combined class action against Link Group Administration Holdings (ASX: LNK) last month, UK law firm Leigh Day this week struck out on its own by serving a group action in England on behalf of investors in the failed Woodford Equity Income Fund (WEIF).

Leigh Day and fellow UK law firm Harcus Parker had last month sought to unite their separate class actions against Link’s UK subsidiary, Link Fund Solutions, but they were knocked back by a British judge who gave them until January 18 to lodge their separate claims.

Link announced to the market that Leigh Day’s claim on behalf of 985 investors in WEIF, which collapsed in 2019, had been lodged.

It is one of three class actions faced by Link in English and Welsh courts with Harcus Parker representing 1,918 investors and fellow UK law firm Wallace representing 3,215 claimants.

In a brief statement to the ASX this morning, Link said it would ‘vigorously defend itself against these proceedings’.

WEIF, which was led by former UK investment guru Neil Woodford, collapsed leaving £3.7 billion ($6.5 billion) of investor funds frozen. The financial implosion has hounded Link, which was trustee of the fund, ever since.

The fallout ultimately led to Canada’s Dye & Durham having to walk away from a $2.5 billion takeover offer for the share and superannuation solutions provider last year. The deal was scuppered by UK's Financial Conduct Authority’s (FCA) requirement that Link set aside £306 million ($536 million) for penalties in relation to the WEIF collapse.

Leigh Day’s class action against Link claims that the company ‘allowed WEIF to hold excessive illiquid or difficult-to-sell investments, which caused investors significant loss’.

“In doing so, we consider Link breached the FCA Handbook rules and failed to properly carry out the management function of the Woodford Equity Income Fund,” the law firm says on its website.

Link last month affirmed it was on track to deliver operating EBIT of between $75 million and $80 million for the first half of FY23, which is in line with FY23 guidance of 10 to 12 per cent higher than FY22.

Update (19 January 2023): British law firm Harcus Parker has served a class action against Link’s UK subsidiary, meeting the 18 January deadline (UK time) in accordance with the court ruling against a joint class action with clients of Leigh Day in December.

Link today reiterated that it would be ‘vigorously defending’ the action in relation to the LF Woodford Equity Fund.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Business success comes from thinking inside the box for TAXIBOX founder
Partner Content
On a first glance, the world of storage solutions might not seem particularly exciting ...
TAXIBOX
Advertisement

Related Stories

Superhero and Swyftx's $1.5 billion merger falls apart

Superhero and Swyftx's $1.5 billion merger falls apart

A merger between cryptocurrency exchange Swyftx and share-trading p...

Finfluencer crackdown: Federal Court rules 'ASX Wolf' breached financial licence laws

Finfluencer crackdown: Federal Court rules 'ASX Wolf' breached financial licence laws

The Australian Securities and Investments Commission’s (ASIC)...

Australian law firm launches its own ‘dieselgate’ class action on behalf of Mercedes-Benz owners

Australian law firm launches its own ‘dieselgate’ class action on behalf of Mercedes-Benz owners

A successful $1 billion lawsuit in the US against German car giant ...