Class Action

Centro Properties falls after second disclosure lawsuit lodged

Centro Properties Group declined in Sydney trading after the company said it will “vigorously defend” the second class action claim filed alleging the company misled investors.

Centro, the Australian owner of U.S. malls that has lost more than A$7 billion ($6.7 billion) of market value in the past year, dropped as much as 2 cents, or 5.6 percent, to 34 Australian cents and was at 34.5 cents at 11:02 a.m. on the Australian stock exchange.

The claim is the second lodged against Centro this month after a class action was initiated by Maurice Blackburn on May 9. Legal action may further threaten the survival of Centro as it works to repay debt after winning an extension this month on as much as A$6.6 billion owed to creditors.

Centro Retail Group, a unit of Centro Properties also named in the suit, fell as much as 5.4 percent to 35 Australian cents, the lowest in more than a month, and traded at 35.5 cents.

Slater & Gordon will represent applicants Nicholas Vlachos, Monatex Ltd. and Ramon Franco in the class action filed in the Federal Court in Melbourne, Melbourne-based Centro Properties said today in a statement to the Australian Stock Exchange.

The Maurice Blackburn action alleges Centro and its unit Centro Retail Group unit breached their obligations to keep investors fully informed between Aug. 9, 2007 and Feb. 15, 2008.

(Published by Bloomberg 26, 2008)