Check out my new article: https://litigationfinancejournal.com/the-e1-4b-steinhoff-securities-fraud-settlement/

Steinhoff International Holdings NV recently settled the European Union’s second largest securities fraud claim, finalizing three years of complex contentious negotiations. Steinhoff, a Dutch firm with headquarters in South Africa, once operated over 40 retail brands across 30 countries. At its pinnacle, Steinhoff was valued at nearly €20B … and then in December 2017, Steinhoff disclosed accounting irregularities and the stock plunged 90%. 

BurfordCapital.com recently profiled the Steinhoff securities fraud scenario through to this month’s resolution.  Announcement of the securities fraud situation wiped out €12B in share value, and Steinhoff faced nearly €8B in international legal claims. 

As it was not entirely clear if Steinhoff would be operational given the overall crisis, Burford was brought in to help victims of the securities fraud debacle recover losses. Burford outlines that settlement negotiations were forced to employ strategies to overcome conflicts of interest due to Steinhoff’s overall precarious financial predicament.

Ultimately, Steinhoff’s settlement provides €800M to shareholders who were defrauded by the faulty accounting practices. Deloitte, which was Steinhoff’s former auditor, offered an additional €110M in compensation. Burford highlights recovering 20%+ of its client’s losses, an overall solution that still allows Steinhoff’s business to operate in the near-term.