Law firm Quinn Manuel Urquhart & Sullivan said today the litigators were representing aggrieved shareholders and would pursue the class action with financing from Burford Capital, a leading global finance firm focused on law.
The action was filed in the Supreme Court just two days after RCR went from a trading halt at the start of last week to a voluntary suspending on the ASX, citing concerns about its 2019 earnings outlook that was expected to be released at the time.
RCR holds several large engineering and construction contracts for multiple renewable energy projects in Queensland and Victoria.
The Australian engineering and infrastructure company went into a trading halt on 30 July 2018. On 28 August, it disclosed operational issues relating to two solar farm projects in Northern Queensland, which led to substantial cost overruns and a net loss for RCR for FY2018.
On 30 August 2018, RCR shares were reinstated to the ASX. The share price fell by more than 60% - from $2.80 to $1.05 - wiping out hundreds of millions of dollars of shareholder value.
"It's unlikely that the recent alarming disclosures by the company could have come as a surprise to management - if they did, that's worse. RCR shareholders have seen a catastrophic decline in their share value," Quinn Emanuel partner Damian Scattini said.
In August it reported serious losses for the previous financial year with a A$57 million cost blowout on its Daydream and Hayman solar farm contracts in Collinsville, Queensland, leading to a $16 million net loss on top of the share value wipe-out.
On Wednesday last week the Victorian branch of the Electrical Trades Union issued a notice to employees working on RCR's Victorian projects to immediately stop work, demanding that RCR pay arrears owed to contractors.
"The turmoil in RCR is not limited to workers entitlements there are also grave concerns for sub-contractors as well if the Mildura experience is anything to go by, in that scenario the local contractor has issued a stop to work until RCR's future is decided," ETU state secretary Peter Ong said last week.
"The ETU members call on the state government to guarantee that no further work in the renewables sector will go to RCR, they clearly can't be trusted to deliver."
