It’s class action lawyers against compensation litigators, at 10 paces.
Two of Australia’s biggest law firms are squaring off in a battle that will bring extraordinary tension into Australia’s legal community.
Slater and Gordon, whose share price has been hammered since its abandoned its profit guidance because its poorly performing UK business, says it hasn’t been notified of any legal proceedings.
However, Maurice Blackburn, the class action lawyers, confirmed it is opening registrations to aggrieved shareholders wanting to pursue a class action to recover the lost value of shares.
“Shareholders in Slater & Gordon have a right to be profoundly disappointed in last week’s announcement and subsequent further price drop, after having already suffered the company having lost most of its value since April this year,” says Class actions Principal at Maurice Blackburn Jacob Varghese.
“To be walking away from the earnings guidance it reaffirmed only a few weeks ago makes it increasingly hard to believe that the company has proper systems in place or that the guidance should have been given in the first place.”
A second law firm, ACA Lawyers, is considering another class action lawsuit against Slater and Gordon on behalf of investors who have lost money from the falling share price.
Slater and Gordon’s share price was down more than 7% today to $0.905.
The market cap of the business is about $319 million, down from $2.8 billion in April. The company’s net debt is $650 million.
Draft results from Slater and Gordon’s UK business were circulated to its senior executives a week before the law firm told the market it had abandoned its profit guidance.
In a reply to a query from the ASX this week, Slater and Gordon said draft November results from the UK were distributed internally on the night of December 9.
However, the company says the draft was internal management information only and was insufficiently definite to warrant disclosure to the market.
The company needed to make a “fullsome” assessment of that information which continued to be classed as confidential. This process of clarification, verification and confirmation was completed on the night of December 16 and the information was released to the market the next day