Plaintiff Firm Slater & Gordon Hits a Major Hole
All is not peaches and cream for plaintiff lawyers who acquire abroad after IPOs. Slater & Gordon just announced almost $500 million of losses, and a major restructuring. The losses follow big moves into the UK and at least one apparently awful acquisition. The Global Legal Post has more specifics in a March 1, 2016 article. The introduction is set out below; the entire articles deserves a read. No doubt lawsuits will follow.
A take away? The litigation industry can be very profitable, or not.
“As part of a series of announcements to the Australian Securities Exchange on Monday, embattled firm Slater & Gordon confirmed that it is likely that a ‘number’ of offices will close as part of a widespread re-organisation of the UK business. It appears likely that the restructure will significantly expand cuts already under negotiation at offices in Derby and Manchester, though the total number of UK redundancies is not yet known. A consultation process with some employees will begin this week and will continue for ‘several months’, the firm has indicated.
Massive UK write-down
Slater & Gordon revealed a massive loss of A$958m (£493m) on Monday, sending the firm’s shares down 25 per cent to 62.5c per unit. The vast majority of the loss is attached to an A$814.2m write-down of the value of Slater & Gordon’s UK business for the six months to 31 December. Specifically, the firm has suffered a write-down of goodwill arising from its £677m acquisition of the professional services arm of insurance outsourcer Quindell last year, though it is understood that performance was also lacklustre across the UK arm.”