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Amazon, YUM Brands dragged into GetSwift class action
A $300 million class action against GetSwift has been expanded to include the last mile logistics group's announcements about NA Williams, YUM Brands and Amazon ahead of its first court hearing later this month.
The expanded statement of claim filed in the Federal Court of Australia on Thursday comes as the former market darling continues its search to recruit new directors and an independent chairman.
According to filed documents, law firm Squire Patton Boggs has broadened its claim following GetSwift's statement to the market in February about enterprise clients, which are clients with multi-site requirements and monthly volumes of more than 10,000 deliveries. The company said almost 50 per cent of its enterprise client contracts had progressed through to early stages of revenue generation.
"It's in the context of GetSwift making announcements that they won't make fake announcements, and only make announcements where there are real income-generating prospects," Squire Patton Boggs' Amanda Banton said. "If 50 per cent of the enterprise contracts are not revenue generating, you have to wonder why they were announced at all."
The Squire Patton Boggs class action was filed last month on an open class basis, meaning shareholders who acquired shares during that period will be automatically included. It is not clear whether some investors will exercise their right to opt out of the action.
Broader scope
Ms Banton said among the reasons for expanding the claim was to allay market concerns that a potential competing class action may have a broader scope.
"You have to look at the futility of a competing class action," she said.
The action is set to be heard on March 29, though the parties are expected to meet before then to discuss a potential settlement. GetSwift, which has said it will contest the action, is being represented by Quinn Emanuel for both the class action and the investigation by the Australian Securities and Investments Commission, which were triggered by an investigation by The Australian Financial Review into GetSwift's market announcements and failure to disclose contract losses.
Ms Banton said the law firm was seeking details from investors about when they bought and sold GetSwift shares to better assess the potential damages.
Part of the Squire Patton Boggs claim relies on the company's statement on October 31 that said: "The company will only report executed commercial agreements. Unlike some other groups, it will not report on memorandum of understandings or letters of intent that are by their very nature not commercially binding and not a valid assurance of future commercial outcomes."
GetSwift shares closed at 51¢. Following the announcement about a deal with Amazon, which triggered an ASX query, the company raised capital at $4 a share.
