Ontario judge certifies a $1 billion class action lawsuit against SNC Lavalin
claim arises from alleged payments made by SNC-Lavalin to members, associates of Gadhafi regime
MONTREAL—An Ontario judge has certified a $1-billion class-action lawsuit against SNC-Lavalin on behalf of investors who saw the value of their investment in the company plummet on revelations about payments in North Africa.
The Montreal-based engineering and construction firm didn’t oppose the certification in exchange for the plaintiffs withdrawing their original plans to seek punitive damages, one of the lawyers involved with the case said.
Dimitri Lascaris said the speed of the certification was the quickest he’s seen because of the company’s decision not to fight it.
SNC-Lavalin also agreed to pay nearly $250,000 to advertise the notice of claim and to cover fees incurred for two plaintiff experts.
The company said it intends to “defend our interests vigorously” and noted the case is limited only to statutory claims under securities legislation.
The ruling doesn’t apply to a separate $250-million claim filed in Quebec containing similar allegations that was filed in March on behalf of investors in Quebec.
A ruling to certify that claim is expected in a few weeks.
Two separate Ontario lawsuits were merged earlier this year.
A trial could begin next year unless the case is settled.
The lawsuit was brought on behalf of all SNC-Lavalin investors who purchased SNC-Lavalin securities between Feb. 1, 2007 and Feb. 28, 2012 or who bought debentures through the company’s June 2009 prospectus offering.
The lead plaintiff is Brent Gray, a resident of Surrey, B.C., who purchased 600 shares in January at $52.20 per share.
The suit claims, among other things, that a 2009 prospectus offering $350-million of debentures failed to contain “full, true and plain disclosure of all material facts.”
The claim arises from alleged payments made by SNC-Lavalin to members, associates and agents of the Gadhafi regime to secure contracts for infrastructure projects in Libya.
The allegations have not been proven in court.