Slater & Gordon class action on the cards
AUSTRALIAN law firm Slater & Gordon could soon be served with shareholder class action papers.
Legal funders JustKapital Litigation Partners and Woodsford Litigation Funding have joined forces and agreed to the terms of a conditional funding agreement with ACA Lawyers to prosecute a class action against the listed law firm on behalf of shareholders who have seen its share value drop by A$1bn in the last year.
ACA said in December it was considering the action against Slater & Gordon, but the additional support will give them the ability to draw on a wider pool of potential litigants.
Meanwhile, rival law firm Maurice Blackburn has since also flagged its plans to file a shareholder class action against the company.
JustKapital executive chairman has Philip Kapp said that the claim will likely involve a number of UK-based institutional investors, who have suffered substantial financial losses as a result of Slater and Gordon’s alleged misconduct.
The potential shareholder claims against Slater & Gordon will be based on statements issued by the company’s board in relation to earnings guidance in 2015, as well as statements made during the group’s A$890m capital raising for its £673m acquisition of the Liverpool-based professional services arm of Quindell, the British insurance claims processor.
Earlier this month we reported that the firm is planning office closures as part of a reorganisation of the UK business after posting a near £500m loss, following a $814m writedown on its acquisition of Quindell.The writedown led to the group recording a net loss of $958.3m for the six months to December 31.
The firm, which employs a total of 3,800 people in the UK, is working on a restructuring proposal and said that it was likely ‘a number’ of UK sites will close, with an unknown number of potential redundancies.
