Loss-making online sport apparel retailer Surfstitch has fallen into administration due to the impact of several legal battles.
The ASX-listed company's shares have been in a trading halt since May after disgruntled shareholders launched a class action alleging the company misled or deceived investors with its financial forecasts.
Another shareholder class action has also been launched against Surfstitch, it is locked in litigation over a content sharing, and the company's financial disclosures are being probed by the Australian Securities and Investments Commission.
The Surfstitch board on Thursday appointed administrator FTI Consulting, as the company said those matters had brought high levels of uncertainty and material costs.
The group's non-operating enitities, Surfstitch Group and Surfstitch Holdings, are in the control of administrators, while its Australian, UK and US websites - Surfstitch, SurfDome and Swell - are not, and will continue to trade as normal.
FTI's corporate finance leader John Park said the administrators will work closely with the operating businesses to preserve value for stakeholders.
"The legal proceedings against the non-operating SurfStitch companies will be stayed following the appointments, which will provide the group with breathing space to focus on trading into the critical December peak period," he said.
The administrator will investigate the potential for a recapitalisation of the non-Operating SurfStitch companies and will provide an update at a creditors meeting due for September 5.
