Law firm Slater and Gordon faces another potential class action.
The troubled ASX-listed company already has a $250 million class action being led by Maurice Blackburn Lawyers, which centres on the rapid fall in market capitalisation.
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 have been on a steep slide because of its underperforming UK business and the British government plans to limit compensation for road accidents.
The shares last traded at $0.093, giving a market value for the company of $32.3 million, far less than potential claims against the law firm.
The latest Slater and Gordon has been told by Johnson Winter & Slattery Lawyers that it acts on behalf of a shareholder of the company, Babscay Pty Ltd, which intends to start proceedings. Babscay isn’t listed as a top 20 shareholder.
The letter from Johnson Winter & Slattery says the claim will be based on allegations that Slater and Gordon’s financial statements in 2013, 2014 and 2015 contained misleading representations.
In August, 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.