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Billabong Pays Millions to Settle Class Action Lawsuit

Australian surfwear brand Billabong International has agreed to settle class action proceedings relating to its share price collapse in 2011.

The Gold Coast-based group said it would pay 45 million Australian dollars (about $33.8 million) to shareholders who acquired ordinary shares or American Depository Receipts in Billabong on Feb. 11-Dec. 19, 2011.

Proceedings kicked off in Australian federal court in March on behalf of about 730 investors, led by Newstart 123, accusing Billabong of engaging in “misleading and deceptive conduct” and “failing to inform the market about information which had a material impact on the value of Billabong securities.”

Newstart 123 said the value of its investment, worth 30 million Australian dollars ($22.6 million), was halved in a little more than a month.

According to a statement released Monday by Billabong secretary Tracey Wood, the proposed full and final settlement includes interest, litigation costs and the applicant’s legal fees. The payout, which the company said is not an admission of liability, is subject to court approval.

A seven-week trial was scheduled to start next March. Billabong said the settlement will have no impact on immediate or future cash flows or earnings reports.

Shares (ASX: BBG) traded Monday at 1.28 Australian dollars, or about $0.96.

Earlier this year Billabong reported a 7.6% increase in total group sales in the six months ended Dec. 31, 2015, as revenue rose in the Americas, Asia Pacific and Europe. At the same time, however, the company posted a net loss after tax of 1.6 million Australian dollars ($1.2 million), compared with a net profit of 25.7 million Australian dollars ($19.4 million) in the prior year’s period.