Slaters to pursue recapitalisation with court approval
The Federal Court has permitted Slater and Gordon to pursue two schemes of arrangement with its creditors, which are essential to its recapitalisation plan.
The firm announced to the ASX yesterday that the Federal Court had made orders to approve the distribution of explanatory statements in connection with two schemes of arrangement with Slater and Gordon’s creditors.
Slater and Gordon proposed one scheme with its secured senior lenders to implement its recapitalisation plan, and another with its shareholder claimants to settle the Hall proceeding and other shareholder class actions against the firm.
Having received the Federal Court’s approval, Slater and Gordon will convene the two creditors’ meetings on 28 November at the Marriott Hotel in Melbourne.
If approved by the creditors, the schemes will still require the blessing of Slater and Gordon’s remaining shareholders. This will be sought at the firm’s annual general meeting (AGM) on 6 December.
Slater and Gordon also issued an indicative timetable for its recapitalisation, subject to change.
The timetable lists the date of the first hearing for the approval of the Hall proceeding settlement as 16 November. The court is set to deliver its final judgment on the schemes on 14 December.
The schemes, if approved, will come into effect one business day after the second court hearing. The senior lender scheme will be implemented five business days after the hearing.
Slater and Gordon’s lenders will control up to 96 per cent of the company if the recapitalisation plan goes ahead in its current form.
The firm’s financial troubles, which came to light following the acquisition of Quindell in 2015, have sparked debate over whether law firms should be allowed to list on the ASX.