Slater and Gordon's threatened action against the rump of the business formerly known as Quindell over the £637m sale of Quindell's professional services division has 'a prospect of success' according to an independent opinion, the firm said today. The Australian-listed legal services giant is seeking £53m from Watchstone Group under a warranty attached to the sale.
Watchstone denies any liability.
Fallout from the 2015 acquisition of Quindell's professional services division has brought Slater and Gordon close to collapse over the past year. In June it reported a £577m loss. It also faces legal actions from shareholders over the collapse in the share price of Slater and Gordon Limited.
In the latest development, Slater and Gordon told the Australian stock exchange that it had obtained an independent barrister's opinion that a warranty claim presented by Slater and Gordon Limited and/or Slater and Gordon UK 'has on balance a prospect of success'. If successful, such claim would have a likely value of £53m.
Watchstone Group plc, a UK listed company with interests in insurance and healthcare, said it would keep £50m in an escrow account set up to cover any liabilities arising from the deal until the claim is resolved. It added: 'Watchstone remains satisfied that the warranty claim has no merit and will defend it robustly if proceedings are brought.'
A statement said that the company had cash of £83.1m excluding the warranty escrow.
On the Australian stock exchange, the announcement pushed Slater and Gordon’s share price up by an Australian cent to A$0.32 (£0.19).
Slater and Gordon to chase £53m refund on Quindell
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