Slater and Gordon has closed a deal with its lenders, leaving US-based private equity group Anchorage Capital in control of the law firm.
The lenders will end up with 95% of the ASX-listed company, bringing on a restructure of the board of directors.
And Andrew Grech is stepping down as group managing director effective immediately.
He will remain a non-executive director until a replacement can be found.
Hayden Stephens, CEO Australia, and Ken Fowlie, CEO UK, will stay on.
The recapitalisation agreement means funds managed by Anchorage will hold a majority share of the secured debt.
Existing shareholders will end up with only about 4% of the company.
The company will have $30 million of debt.
Slater and Gordon shares hit a high of $8.07 in 2015, valuing the world’s first stock exchange-listed law firm at $2.8 billion.
But they went on a steep slide because of the company’s underperforming UK business and the British government’s plans to limit compensation for road accidents.
The shares last traded at $0.091
In August last year, the company posted an annual loss of $1.017 billion, including a $879.5 million non-cash impairment against the value of goodwill in its UK business.
In February this year, Slater and Gordon posted a net loss of $425.1 million, including $350.3 million impairment charge against the value of UK assets.