Shares in law firm Slater & Gordon Limited (ASX: SGH) are down...

Shares in law firm Slater & Gordon Limited (ASX: SGH) are down 3% to 46.5 cents today as the loss-making lawyers remain in danger of bankruptcy unless it can reverse disastrous cash outflows delivered in the first half of FY16. (Yes we know if finished down 3% we watch the share price dip like hawks, and that their debt situations titters on Bankruptcy)

As at December 31 2015 the group had drawings of $783 million on its debt facilities versus a limit of $850 million, with a net debt position of around $741 million and available liquidity of around $119 million. (we know, this has been mentioned so many times, we know the risks)

The first half of the financial year also saw a net cash outflow of $83.3 million, which was primarily the result of the disastrous performance of the firm’s $1.3 billion acquisition of the claims management business of UK firm Quindell Plc. OLD NEWS

Management weren’t wrong in describing the acquisition as ‘transformational’ with the share price sinking around 90% (obviously a big drop from $8) since the deal and the law firm now at the mercy of its lenders after having to renegotiate the terms of its borrowing facilities. (everyone re-negotiates loan facilities, didn't twiggy do the same with FMG with falling ore prices)

The group’s chief executive Andrew Grech must now be on borrowed time at the firm and a career in venture capital seem unlikely when he does eventually head out the door in search of pastures new. (obviously he has to go, they need to pin this failure on someone :0)