Slater and Gordon has confirmed that its billion-dollar claim against the Watchstone Group has commenced.
In a notice to the ASX, the listed law firm said that its UK subsidiary filed and served the claim against Watchstone Tuesday. In May, Slater and Gordon said that its UK business was preparing a £600m ($1bn) claim against Watchstone, stemming from the disastrous acquisition of the latter’s professional services division.
The law firm picked up the business, then named Quindell, in early 2015 for $1.2bn. A little over a year later, Slater and Gordon wrote off most of the value of the acquired business, resulting in a loss of more than $1bn for fiscal 2016.
The claim alleges that Watchstone and its leaders committed fraud. It comes after Watchstone said in its most recent full-year performance report that it is considering selling off what remains of the business in parts.
Watchstone last reported a net loss of £69.1m for fiscal 2016. Slater and Gordon’s claim exceeds Watchstone’s remaining assets and the contested cash in escrow held for warranty claims related to the 2015 acquisition.
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