The British subsidiary of Australian law firm Slater and Gordon will take legal action against Watchstone Group, the UK insurer previously known as Quindell, over the botched acquisition of the latter’s professional services arm.
In an announcement to the Australian stock exchange, the company said Slater & Gordon (UK) plans to file a claim against Watchstone in the High Court of England and Wales for about £600 million over the coming weeks.
Slater and Gordon bought Watchstone’s professional service division in 2015, only to post more than £570 million in losses in 2016 after writing off most of the acquired business’s value.
The law firm said the claim is based on “serious allegations”, including fraud, against Watchstone and its then senior management.
“The filing and timing of the claim also takes into account the recent market announcements by Watchstone that, in the face of the claim, it intends to divest itself of its remaining assets,” the company said.
“The value of that claim exceeds the net assets of Watchstone and the monies currently held in escrow by several hundred million pounds.”
Slater and Gordon said the claim will be pursued “vigorously.”
According to a report by
Sydney Morning Herald, Watchstone confirmed that it had been notified by Slater and Gordon of pending “fraudulent misrepresentation” claims.
The company said in a statement: “Watchstone denies any misrepresentation in the strongest terms and remains satisfied that neither the warranty claim nor a misrepresentation claim have merit and will defend such claims robustly if proceedings are brought.”
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