Law firm Slater and Gordon reports a net loss of $425 million in the six months to December 31. (Vision courtesy ABC News 24) The company on Monday said its shares – which have plummeted from $8.07 to 7.4 cents in a little over two years – would remain in a trading halt until as late as Wednesday to allow for an announcement to market. Under a recapitalisation deal announced two weeks ago, Slater and Gordon’s lenders will assume 95 per cent of its stock, conditional on the outcome of legal proceedings. Slater and Gordon is facing class actions from aggrieved shareholders and has launched its own claim following the collapse in the firm’s value following its disastrous $1.2 billion acquisition of British firm Quindell in 2015.
Managing director Andrew Grech has stood down – although he remains on the board – and all other directors prepare to follow in his steps after agreeing to the renewal process, a spokesperson said. A replacement board will be appointed by the new lenders, led by majority debt holder, Anchorage Capital. On May 5, the new lenders provided a $40 million working capital facility with a three-year term to keep the law firm operating. Slater and Gordon local chief executive Hayden Stephens will continue to lead the business locally, with all reports now going directly through his office.
The law firm’s market value stood at $2.8 billion in April 2015, ahead of its ill-judged run at Quindell – now known as Watchstone – and its British professional services division. Slater and Gordon alleges that Watchstone fraudulently misrepresented its financial position, while the company’s burnt shareholders allege some of Slater and Gordon’s financials for 2013, 2014 and 2015 may have contained false and/or misleading statements.