14th Dec 2015 18:06
LONDON (Alliance News) - Watchstone Group PLC, formerly Quindell PLC, late Monday said it has received a letter from an unnamed law firm representing hundreds of claimants stating it plans to commence action against the company under the Financial Services and Markets Act 2000.
Watchstone said it will "vigorously defend all claims" made against the company, but said the potential claims could amount up to GBP9.4 million. The law firm which has sent the letter is representing a total of 342 claimants, it said.
"Whilst the company is yet not in a position to verify the assertions in the letter of claim, consistent with the previous announcement of the company and correspondence from the law firm, the letter of claim details the expected value of the potential claims against the company to be approximately GBP9.4 million," said Watchstone.
"As stated previously, the company plans to vigorously defend all claims," it added. "The company does not believe that the letter of claim will adversely impact the company's previously announced reduction of capital and return of capital."
At the company's annual general meeting earlier this year, shareholders approved a name change to Watchstone Group from Quindell PLC as part of a move away from the company's troubled past.
In late November, the company said its shares would be suspended from this Wednesday pending a court hearing about its planned return of capital to shareholders.
The company intends to return 90.00 pence per share, or GBP414.0 million in total, to its shareholders following the sale of its professional services division to Australian law firm Slater & Gordon. This return along with a capital reduction is subject to court approval, and should it go ahead then the company said it would expect its shares to devalue by 90 pence before its 1 for 10 consolidation goes ahead.
If the court rejects the company's proposals, its will request for its shares to re-commence trading and the consolidation will not take place.
Watchstone shares closed down 2.3% to 95.0p on Monday.
By Joshua Warner; [email protected]; @JoshAlliance
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