The prominent entertainment company, Crown Resorts, has reached a settlement agreement of $94 million to resolve a class action lawsuit initiated by its investors.
The legal action, commenced in December 2017, revolved around Crown’s alleged failure to adequately inform investors about the potential dangers linked to its promotional endeavors in China. These activities culminated in the apprehension of 18 staff members in 2016, resulting in a sharp decline of almost 14% in Crown’s share value. The investors contended that Crown had provided misleading information regarding the legitimacy and security of its business dealings in China.
Representing the investors was Maurice Blackburn, a well-known Australian legal firm specializing in class action lawsuits. They asserted that Crown had engaged in a risky venture by heavily targeting high-stakes Chinese gamblers, despite being aware of China’s stringent measures against activities associated with unlawful gambling.
The $94 million settlement, encompassing interest and legal expenses, is contingent upon receiving the green light from the Federal Court.
Crown anticipates recouping a substantial portion of the settlement sum from its insurance providers but acknowledges that the definitive amount and any subsequent legal actions remain undetermined.
The company’s directors have concluded that this agreement represents the optimal path forward for the organization and its investors, as it demonstrates the most favorable commercial logic.