21st Oct 2019 10:38
(Alliance News) - Technology firm Watchstone Group PLC said Monday it reached a settlement with Slater & Gordon Ltd amid a long-running legal dispute over the GBP637 million sale of its professional service division in 2015.
Shares in Watchstone were 33% higher at 142.28 pence in London on Monday.
On Monday, Watchstone and Slater & Gordon (UK) 1 Ltd agreed a settlement which will see Slater & Gordon receive GBP11 million from cash held in escrow with the remaining GBP39 million being distributed to Watchstone.
No application for costs is being made by either firm.
"We are pleased with the resolution of this matter," Watchstone Chair Richard Rose said. "Whilst Watchstone remains firmly of the view that the legal action commenced by the other side was without merit, the board believes that a settlement at this level is in shareholders' interests as it brings certainty."
"It also releases a significant cash sum that has been locked in escrow and unavailable to us for some considerable time," Rose added. "The decision was made with consideration of the costs of pursuing the company's defence and counterclaim at trial and to the inherent uncertainty of the outcome of any legal process."
In June 2017, Australian law firm Slater & Gordon made a claim of GBP637 million related to its 2015 acquisition of the professional services arm of Watchstone. Slater & Gordon claimed that Watchstone - then known as Quindell PLC - had fraudulently misrepresented the unit during the sale.
Shortly after the deal, Slater & Gordon booked a GBP880 million impairment related to the acquired business after the UK Serious Fraud Office opened an investigation into the unit over past accounting practices.
In August, Watchstone launched a GBP63 million counterclaim against Slater & Gordon for damages related to supposed "unlawfully obtained" information about its wider business secured whilst negotiating the acquisition of the unit.
By Ahren Lester; [email protected]
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