Slater & Gordon reveals losses of £493,000,000 and imminent redundancies
04 March 2016
After the recent suspension of its shares
, Slater & Gordon admitted on Monday that it suffered a staggering loss of £493 million during the second half of 2015. As a result, the P.I. firm's shares dropped faster this week than an
accident prone claimant falling down an uncovered manhole, with the price down by more than 50%.
The firm's losses were largely attributable to the write-down of goodwill arising from S&G's acquisition of Quindell's professional services division
in March 2015. Managing director Andrew Grech said at the time of the purchase that the firm would become “the number one personal injury law group in the UK
". He offered to fall on his sword this week, but his resignation was rejected by S&G's board.
To make matters worse, a banking syndicate that finances S&G has demanded that the firm demonstrates it is taking steps to make the business viable. The banks could request a full debt repayment by 31 March 2017 if S&G fails to present a satisfactory restructuring proposal next month. The firm said that some of its services will be consolidated leading to "the closure of a number of current sites
" and "a reduction in the total number of UK employees over the next 12 months
". If you are an employee who might be affected, let us know what's happening here
||Slater & Gordon reducing its headcount
Last December, rival firm Maurice Blackburn launched a class action against S&G, open to investors who purchased shares between
April Fool's Day
1 April and 16 December 2015. And this week MB made an opportunistic statement that S&G's write-downs cast "enormous doubt on the adequacy of disclosures"
made by the firm "in relation the true value of the Quindell assets
ACA Lawyers has also announced that it has reached a financial agreement with funding groups to investigate bringing a shareholder class action against S&G. Bruce Clarke at ACA Lawyers said that there was anger from "small mum and dad investors to large institutional investors