Australian class action law firm Slater & Gordon Ltd filed a suit against surf-wear retailer Billabong International Ltd, accusing it of "conduct that was misleading or deceptive" in a series of earnings updates four years ago.
In a statement filed in the Federal Court of Victoria state on Wednesday, and obtained by Reuters a day later, Slater & Gordon said its client, the Malone Family Superannuation Fund, was seeking unspecified damages from Billabong, which it accused of breaching its disclosure obligations.
The fund bought just under A$30,000 ($23,466) worth of Billabong shares at an average of A$4.35 per share in November 2011, the statement from the legal firm added. The shares later fell following a series of earnings downgrades.
If Billabong had been more forthright, the fund "would either have bought Billabong securities at a price which had not been artificially inflated or they would have acquired securities in another listed entity instead", the statement added.
Billabong said it rejected the claim and would "vigorously defend" itself.
The retailer said its board has appointed a subcommittee to handle the lawsuit, and that the management "remain absolutely focused on the ongoing turnaround of the company's operations globally".
Billabong was saved in 2013 by a refinancing deal from U.S. private equity firms Centerbridge Partners LP and Oaktree Capital Management, which replaced its leadership.
The company posted a half-year profit in February, its first profit in three years.
On Thursday Billabong shares were down 0.8 percent at 60 cents, in a weaker overall market. The shares traded as high as A$6.40 in 2011.
A Slater & Gordon spokesperson said the matter will go to a directions hearing on April 23.
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