Trading in Slater and Gordon shares has been halted as the law firm prepares a statement about a class action.
Maurice Blackburn, one of Slater and Gordon’s major competitors, is acting for the class action by shareholders who purchased stock during between March 2015 and February this year.
Slater and Gordon says the halt is related to “mediation” of the action started in October last year and to the company restructure announced last month.
The shareholders in the class action allege there were problems within Slater and Gordon that extended beyond its acquisition in the UK of Quindell’s Professional Services Division.
Last month Slater and Gordon 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.
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 $0.074.
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.