(Alliance News) - Litigation Capital Management Ltd on Monday said it won its legal claim over Carillion's formers auditors KPMG.
The asset manager specialising in dispute financing solutions said the claim arose from KMPG's conduct of its audits for Carillion between 2014 and 2016, which it brought to the commercial court of the High Court of Justice of England & Wales in May 2021.
It said a confidential settlement was reached between the parties, with Litigation Capital set to receive AUD3.2 million, or GBP1.8 million, as a performance fee under its managed global alternative returns fund, referred to as 'Fund I'.
This was because the Carillion claim was funded 25% directly from Litigation Capital's balance sheet and 7% from Fund I.
It also expects a gross profit of AUD6.3 million after an investment period of 25 months, including the Carillion performance fee.
Litigation Capital described the liquidation of Carillion in 2018 as "the largest corporate collapse in the building and construction industry in UK history" and that it was "pleased to have supported the underlying creditors who suffered financially from the collapse".
"We are pleased that the first substantive resolution of a Fund I investment has generated returns consistent with our historical track record. In addition, the overall returns to Litigation Capital's balance sheet, including performance fees following the conclusion of our first settlement from Fund I demonstrates the strengths of our asset management business model and showcases our thorough due diligence and case selection processes," said Litigation Capital Chief Executive Officer Patrick Maloney
Shares in Litigation Capital closed up 1.7% to 67.60 pence each in London on Monday.
By Greg Rosenvinge, Alliance News reporter
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Litigation Cap. (LIT)