"When a High Court judge this week raised concerns about the pitfalls of the profit motive at publicly listed law firms he cut to the heart of the financial difficulties facing
Slater and Gordon and
Shine Corporate."
"Slaters half-year accounts, due to be published at the end of this month, are expected to include hefty write-downs of its WIP, which totalled $825 million at June 30 least year.
Slaters last week
missed a self-imposed deadline to disclose its gross operating cash flow for the six months to December 31. That is worrying because it suggests the company has inadequate financial systems for measuring its cash flow.
The promise to deliver the gross cashflow report by the end of January was made as recently as mid-December at the same time as Slaters warned it would not meet the profit guidance it had confirmed on November 30."
"However, clients of Slaters and Shine could find themselves at the mercy of other forces if the firms cannot meet their debts when they fall due.
Insolvency would have widespread ramifications.
There are few firms with the capital to take on the level of cases handled by Slaters. High levels of WIP require high levels of capital because it can take 18 months to two years to bring a personal injury case to settlement.
Slaters is a leading class action law firm. Its class action cases would be taken up by rival firms provided they had funding.
One of the liabilities at Slaters that will be difficult to handle in the event of collapse is the off-balance sheet funding that has been used to pay for legal actions.
This funding is unsecured and may not be recoverable if financial solvency issues affected the law firm."
Cherry picked all the nasty bits about sgh....not so much shj lol
More to story Afr prob appreciate the traffic.....
Read more:
http://www.copyright link/brand/chanticleer/high-court-judge-warns-of-conflicts-facing-listed-law-firms-20160202-gmjues#ixzz3zLhtHzEe
(20min delay)