Steinhoff International Holdings N.V. Shareholder Litigation
Following years of negotiation, Steinhoff International Holdings N.V., received approval from courts in the Netherlands and South Africa for a €1.7 billion global settlement with shareholders and creditors. Claimants had filed multiple class and group actions, including the first-ever investor class action in South Africa, alleging that Steinhoff had overstated its assets, issued false and misleading statements, and failed to disclose material information regarding its financial performance and prospects. An Analysis Group team led by Vice President Chris Feige and Manager Hadrien Vasdeboncoeur acted as independent economic advisor to Steinhoff throughout the settlement process and provided economic evidence to the Dutch and South African courts in support of the settlement.
The Analysis Group team, including Managing Principals Richard Starfield, Marc Van Audenrode, and Nicholas Crew and Vice Presidents Benoit d’Udekem and Eric Korman, was initially retained to assist Steinhoff and Linklaters with preparation for litigation, evaluating share price inflation arising from the alleged misstatements and estimating potential total litigation claims from shareholders.
Analysis Group was then retained to assist Steinhoff and Linklaters, its counsel, in developing the proposed settlement structure and claim calculation method for an array of differently situated shareholder claimants and creditors. The Analysis Group team, again led by Mr. Feige and Mr. Vasdeboncoeur, reviewed Claimants’ share purchase and sale records to estimate claims and recoveries under different settlement approaches and worked with settling parties to convey the financial and economic rationale for the final settlement. The team also provided economic and financial analyses to Linklaters, co-counsel Werksmans, and Steinhoff throughout the settlement process, including valuation and financial forecasting, settlement negotiations, and communications with Claimants, courts, and third parties.
As part of the global settlement approval process in the Dutch and South African courts, another Analysis Group team, led by Managing Principal Maureen Chakraborty, Mr. Feige, Mr. Vasdeboncoeur, and Manager Yuxiao Huang, developed a “liquidation comparator” to evaluate potential shareholder claimant and creditor recoveries in a hypothetical liquidation of Steinhoff. To estimate these recoveries, the Analysis Group team valued Steinhoff’s assets and liabilities, and modelled intercompany flows of value between Steinhoff’s myriad corporate entities. The estimated recoveries were compared to expected recoveries in the proposed global settlement in order to provide the courts with evidence of whether the settlement was beneficial to settling parties relative to a liquidation of the company. Mr. Feige presented the liquidation comparator analysis and the economic and financial rationale for the settlement to a court-appointed committee in the Netherlands representing shareholder claimants and other creditors of Steinhoff.
The liquidation analysis and proposed settlement terms were evaluated by the courts as part of their settlement approval processes and led to Steinhoff’s global settlement being formally approved by courts in the Netherlands and in South Africa.