Former bosses at UK law firms acquired by listed Australian practice Slater and Gordon have been freed to cash in their shares – at a fraction of the price they might once have hoped to achieve.  

The company announced last week to the Australian stock exchange that restrictions on around 3.3 million escrow shares held by former directors at Russell Jones & Walker and Walker Smith Way will be lifted from 1 May.

The firms were bought four years and one year ago respectively, with each deal stipulating lock-ins to prevent early sales. 

But Slater and Gordon’s tumbling share price has dissipated almost all value from the stakes.

The share price has dropped in value from A$7.66 in April 2015 to just 26 Australian cents today, with the locked-in shares now collectively worth just over A$850,000 (£462,000). Just a year ago, the value would have been nearer $A25m (£13.6m).

In the case of Russell Jones & Walker, directors of the firm received £27.7m upfront and £8.8m in deferred payments over the next two years as part of the deal announced in January 2012.

The value of the shares issues at the time was said to be worth £17.4m, subject to restraints on sale.

At the time, Russell Jones & Walker said all of the equity owners had taken a ‘substantial proportion of the consideration as shares in the ASX-listed Slater & Gordon demonstrating their confidence in and commitment to the group’.

When the acquisition of Walker Smith Way was confirmed, along with that of Leo Abse & Cohen, the initial cash payment was £10.4m with a further £4.6m deferred over two years. The deal was said to include equity consideration valued at the time at £3.7m.

It is unclear at this stage whether any UK-based shareholders will take advantage of the lifting of restrictions, or whether they have opted to hold onto their investments.

Meanwhile, the deadline is approaching for a decision from Slater and Gordon’s lenders on whether to approve the company's revised business plan. If that plan is not accepted by the end of this month, the lenders can decide to call in their loans by the end of March 2017.