Now Slater and Gordon’s lenders want to see the books

Topics: Alternative business structures

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Listed Australian firm Slater and Gordon’s lenders have invited independent auditors to scrutinise its accounts.

In a statement to the Australian stock exchange today, Slater and Gordon confirmed the appointment of McGrathNicol as independent adviser to its banking syndicate.

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The Australian newspaper has reported that the advisory firm has been appointed by lead financiers National Australia Bank and Westpac to look at revenue and profit figures for the law firm.

Slater and Gordon admitted in December that it was downgrading its profit forecasts after slower case resolutions than expected.

The firm had already seen its share price value plummet following George Osborne’s proposals to reform the personal injury sector, and still faces an inquiry from the Australian Securities and Investment Commission into its financial reporting activities.

In its statement today, group managing director Andrew Grech said it was agreed when the firm reviewed its forecasts that the banks would appoint their own advisers.

‘The company has continued to work collaboratively and cooperatively with the banks and our advisers,’ added Grech.

Slater and Gordon reiterated it has more than A$100m (£48m) ‘headroom’ within its banking facilities, a figure expected to increase as the financial year progresses.

The company’s share price dropped by 86% in 2015 and has continued to struggle since the turn of the year. Its share value fell almost 4% today to A$0.725 per share.

Readers' comments (47)

  • Foundations of sand...indeed the Legal services Act is.

    However, we are all business people now, being a Solicitor is not enough and...shock horror, businesses fail. Get used to it.

    Our local pub went under recently...I don't recall the SRA being asked to investigate that ? Isn't that what the Insolvency Service are there to do, if an IP's report on conduct merits it ?

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  • S&G's share price was 72.5¢ on Thursday. That valued the firm at $250 million yet it owed $623 million (in June) although that might be $720 million (easy mistake to make what's a hundred million dollars nowadays).
    Should they be trading?
    Source www.smh.com.au/business/slater--gordon-bankers-bring-in-investigative-accountants-20160107-gm1d0d.html

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  • I don't get the S&G model either before or after the Quindell purchase. Surely the firms which were purchased by S&G would have been better staying as strong regional players rather than trying to integrate into a national firm? I may be completely wrong but I am far from certain that private client work fits neatly into this sort of structure. The purchase of Quindell was totally baffling. It was on it's knees so why pay £640 million? It is however interesting

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  • S&G obviously know as much about the forthcoming SCL increase as the rest of us!

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  • Feels like Slater and Gordon is a House of Cards, ready to fall.

    The Quindell puchase is the most puzzling acquistion in recent memory. Everyone could see it was toxic, so why couldn't the clever people at S&G see the same?

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  • Anon 12:46,

    There were many legacy firms. All were historically successful, however some had weathered difficult periods before they sold. I don't think it's contentious to suggest that some of the legacy firms would have continued to thrive, but some other legacy firms would have continued to fail to thrive.

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  • Doesn't this sort of embarrassing/catastrophic/shame-faced announcement from S&G usually herald its board awarding themselves a massive pay rise?

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  • There are no Infidel tanks in Baghdad!!!! No, not now never!!! We will not surrender to the banks or the shareholders. The invaders will come to Slater and Gordon and feel the wrath of our glorious Quindell - which will make billions and wipe the smile from their faces!!! Slater and Gordon will be victorious!!! Honest!!

    And if not, don't worry comrades! We, at the board of SGH, commensurate with our position and global standing, have of course accepted our remuneration committee's generous offers of payment, which ought to see us through.

    You see, said Squealer, you do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. I dislike them myself. Our sole object in taking these things is to preserve our health. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organization of this farm depend on us. Day and night we are watching over your welfare. It is for YOUR sake that we drink that milk and eat those apples. Without which we could never have bought Quindell...

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  • Let's hope the SRA have someone involved and its not the individuals who kept an eye on Parabis. I've never known the Bar etc chasing outstanding fees so much and who can blame them with the number of Law firms going belly up.

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  • What the heck is Dominic Cooper on about ??!

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