Juridica Investments Regulatory News (JIL)

21 Dec 2007 08:08

Juridica Investments Limited21 December 2007 The information contained in this announcement is restricted and not forrelease, publication or distribution in, or into, the United States, Australia,Canada, Japan, the Republic of Ireland or South Africa. This announcement isnot an admission document and is not an offer to sell, or a solicitation of anoffer to buy securities in the United States or in any other jurisdiction. Juridica Investments Limited Admission to trading on AIM 21 December 2007 Juridica Investments Limited ("JIL", "Juridica" or the "Company"), aclosed-ended investment company, focused on investing in litigation andarbitration claims, is pleased to announce the commencement of dealings in itsordinary shares of nil par value ("Ordinary Shares") on AIM following the issueof 80 million shares at £1 per Ordinary Share via a successful placing by CenkosSecurities plc and subscription. Juridica, via its investment manager Juridica Management Limited, intends tobuild a diversified portfolio of investments in legal claims and to provideshareholders with an attractive level of dividends and capital growth throughinvesting directly and indirectly in litigation and arbitration cases, claimsand disputes. Highlights: - Initial market capitalisation of £80 million at the Placing Price. - The Company intends to make direct investments in a variety of different claims, including, but not limited to, the following: o property damage, defaulted debt, breach of contract, insurance, antitrust, indemnification, subrogation, environmental liability, securities, expropriation and government taking, unregistered intellectual property and other business claims; o claims and interests involving registered intellectual property (copyright, trademark and patent); and o claims in foreign (non-US) litigation and in arbitration matters. - The principals of the investment manager, Juridica Management Limited, are both licensed lawyers in the District of Columbia (and other US states) with 50 years' combined legal professional experience. - Juridica Management Limited owns 1.5 million Ordinary Shares and Juridica owns 15 per cent. of Juridica Management Limited. - According to the US Bureau of Economic Analysis (BEA), over $180 billion was spent in 2005 on "legal services" in the United States. - Cenkos Securities is acting as Nominated Adviser and broker to the Company. The ultimate goal of the Company is to be a leading source of value-added anddirect financing for large claims in complex litigation and arbitrationworldwide where such financing is considered to be lawful and permitted underlocal law and rules on professional ethics. Commenting on Admission, Lord (Dan) Brennan, non-executive Chairman of Juridica,said, "Following the successful Placing, we are delighted to be admitted totrading on AIM. We believe that Juridica is well positioned to capitalise onthe growth in the worldwide litigation market, in which management hasconsiderable expertise and experience in legal services. The Board would like toextend a warm welcome to all the Company's new shareholders as we seek to buildlong-term value and a platform for future growth. We look forward to reportingour progress to the market in the coming years." Commenting on Admission and the Placing, Richard Fields, of the investmentmanager said, "The global legal market is well-developed. To date there hasbeen limited mechanism for the public to invest in this market and we lookforward to structuring legally and ethically sound investments in litigation. Weare delighted to bring Juridica to the market and give shareholders theopportunity to participate in revenues from litigation." For further information, please contact: Juridica Management Limited Richard W. Fields +1 (212) 277 6555 Cenkos Securities Nicholas Wells/Simon Southwood +44 (0) 20 7397 8900 Bell Pottinger David Rydell +44 (0) 20 7861 3232 Daniel de Belder The Ordinary Shares have not been nor will they be, registered under the USSecurities Act of 1933, as amended, or with any securities regulatory authorityof any state or other jurisdiction of the United States or under the applicablesecurities laws of Australia, Canada, Japan, South Africa or the Republic ofIreland. Subject to certain exceptions, the Ordinary Shares may not be offeredor sold in the United States, Australia, Canada, Japan, South Africa or theRepublic of Ireland or to or for the account or benefit of any national,resident or citizen of Australia, Canada, Japan, South Africa or the Republic ofIreland or any person located in the United States. This document does notconstitute an offer of, or the solicitation of an offer to subscribe for or buy,any Ordinary Shares to any person in any jurisdiction to whom it is unlawful tomake such offer or solicitation in such jurisdiction and is not for distributionin, or into, the United States, Australia, Canada, Japan, South Africa or theRepublic of Ireland. The distribution of this document in other jurisdictionsmay be restricted by law and therefore persons into whose possession thisdocument comes should inform themselves of and observe such restrictions. Cenkos Securities is regulated by the Financial Services Authority and is actingexclusively for the Company and for no one else in connection with the Placingand Admission. Cenkos Securities will not be responsible to anyone other thanthe Company for providing the protections afforded to customers of CenkosSecurities or for advising any other person on the contents of this document orthe Placing and Admission. The responsibility of Cenkos Securities as nominatedadviser and broker to the Company is owed solely to the London Stock Exchangeand is not owed to the Company or any Director or to any other person in respectof their decision to acquire Ordinary Shares in reliance of any part of thisdocument. No representation or warranty, express or implied, is made by CenkosSecurities as to the contents of this document (without limiting the statutoryrights of any person to whom this document is issued). No liability whatsoeveris accepted by Cenkos Securities for the accuracy of any information or opinionscontained in this document or for the omission of any material information forwhich it is not responsible. Copies of the Company's Admission Document will be available during normalbusiness hours on any day (except Saturdays, Sundays, bank and public holidays)free of charge to the public at the offices of Cenkos Securities plc, 6.7.8Tokenhouse Yard, London EC2R 7AS for one month from the date of Admission. This announcement includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identifiedby the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''plans'', ''projects'', ''anticipates'', ''expects'', ''intends'',''may'', ''will'', or ''should'' or, in each case, their negative or othervariations or comparable terminology. These forward-looking statements includematters that are not historical facts and include statements regarding theCompany's intentions, beliefs or current expectations such as those regardingthe Company's business strategy, plans and objectives. By their nature, forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances. A number of factors could causeactual results and developments to differ materially from those expressed orimplied by the forward-looking statements. In light of these factors and theuncertainties and assumptions inherent in forward-looking statements containedin this announcement, such statements may and often do differ materially fromactual results and the events described in them may not occur. Anyforward-looking statements in this announcement reflect the Directors', theCompany's and the Investment Manager's view with respect to future events as atthe date of this document and are subject to risks relating to future events andother risks, uncertainties and assumptions relating to the Company's operationsand strategy. Save as required by law, none of the Company, the Directors or theInvestment Manager has any obligation to publicly release the results of anyrevisions to any forward looking statements in this document that may occur dueto any change in its expectations or to reflect events or circumstances afterthe date of this document. Juridica Investments Limited Admission to trading on AIM Background Juridica Investments Limited is a limited liability, closed-ended investmentcompany registered in Guernsey. The investment objective of the Company is tobuild a diversified portfolio of investments in claims and to provideshareholders with an attractive level of dividends and capital growth throughinvesting in litigation and arbitration cases, claims and disputes. It isexpected that these investments will initially be made predominantly in theUnited States and in international arbitration cases although, in the mediumterm, the Company would expect to make investments outside of the United Statesin jurisdictions where such investments are lawful and permitted under local lawand rules on professional ethics. The Company has appointed Juridica Management Limited (the "Investment Manager"), a new company limited by shares and incorporated in Guernsey, as itsexclusive investment manager to actively locate, select and manage direct andindirect investments by the Company in cases, claims and disputes. TheInvestment Manager was founded by Richard W. Fields and Timothy D. Scrantom, whoare both licensed lawyers in the District of Columbia (and other US states) with50 years combined legal professional experience. Following Admission, familytrusts of Messrs Fields and Scrantom will own 85% of the share capital of theInvestment Manager, and the Company will own 15%. The Investment Manager owns1,500,000 Ordinary Shares. The Company intends to invest 50% or more of the net proceeds of the Placing indirect investments in claims with the balance (after making the investment inthe Investment Manager) net of expenses being invested through loans to lawfirms to finance legal fees and costs in connection with active participation inclaims (through co-counsel agreements with other lawyers). These law firms willinclude Fields & Scrantom PLLC ("FSUS"), a District of Columbia professionallimited liability company owned by the Principals. The current intention of thePrincipals is to create one or more other legal services entities injurisdictions outside of the United States to be controlled by them and lawyersdirectly associated with them to which similar loans will be made by theCompany. Investments by way of loans to FSUS and other law firms will be made when: - a direct investment by the Company is not possible or preferred because (for example) it is not permitted for legal or ethical reasons; - in instances where it is not practicable to get all plaintiffs individually to agree to a direct investment; or - when the Investment Manager considers that better returns or results could be achieved if a Principal or a partner of another law firm were to take an active role in the management and strategy of a case or claim. The ultimate goal of the Company is to be a leading source of value-added anddirect financing for large claims in complex litigation and arbitrationworldwide where such financing is lawful and permitted under local law and ruleson professional ethics. Approximately £74.4 million, after expenses and investment in the InvestmentManager, has been raised by the Company for investment. The Investment Managerexpects that the net proceeds of the Placing can be fully deployed ininvestments within the investment policy of the Company between eighteen andtwenty four months although there is no obligation upon the Company to investthe proceeds within any period of time. The Directors, in accordance with the AIM Rules for Companies, will at eachannual general meeting of the Company seek shareholder approval of the Company'sinvesting strategy. In addition, the Company does not have a fixed life.However, shortly before the sixth anniversary of admission, and every threeyears thereafter the Board will convene a shareholders' meeting at which aspecial resolution to wind up the Company will be proposed. Investment objective and policy The Company intends to invest in a wide variety of arbitration and litigationclaims. Initially, these investments are expected to be made predominantly inthe US and in international arbitration cases through referrals from thePrincipals' established network of lawyers and law firms. The investmentobjective of the Company is to build a diversified portfolio of investments inclaims and to provide Shareholders with an attractive level of dividends andcapital growth through investing directly and indirectly in litigation andarbitration cases, claims and disputes. The Company will seek to meet its investment and yield objectives throughinvesting in large claims, typically where the total recoveries sought exceed $2million. Except where specifically approved by the Board, no single investmentof the Company will exceed $10 million. Investment opportunities will beselected using underwriting criteria which were originally established by thePrincipals. The Investment Manager will seek to achieve diversification of investments byindustry, jurisdiction, claim size and expected time-to-return, although mostinvestments will be long-term with an expected return within two to five yearsof investment. Investments will be structured as loans when a direct investmentby the Company is not possible because (for example) it is not clearly permittedfor legal or ethical reasons, in instances where it is not practicable to getall plaintiffs individually to agree to a direct investment, or when theInvestment Manager considers that better returns or results could be achieved ifa Principal or partner of another law firm takes an active role in themanagement and strategy of a case under a co-counsel arrangement. In the medium term, the Company intends to make direct and indirect investmentsoutside the United States, where it has received a reasoned, written legalopinion that such investments are considered to be lawful and permitted underlocal laws and/or rules on professional ethics. As at the date of thisannouncement, the Company has not made (nor entered into any commitment to make)any direct or indirect investments. Investments and structures Before making an investment, the Company intends to obtain a written reasonedopinion from an independent appropriately-qualified law firm to confirm (subjectto customary exceptions) that the proposed investment will not contravene locallaws or rules on professional ethics. Direct investments The Company will use a variety of structures developed by the Principals and theInvestment Manager to enable the Company to make direct investments inlitigation and arbitration claims. These structures will be carefully customisedby the Investment Manager for each case opportunity in order to seek compliancewith legal requirements and local rules on professional ethics as well asseeking to ensure the enforceability of the Company's direct investmentcontracts and collectability of the relevant share of the recoveries. It is anticipated that typically the Company will pay money to the plaintiff(s)themselves, in connection with the purchase of a percentage of the caserecovery. In some instances, the terms of the investment will require some orall of the claim purchase monies to be paid to the prosecuting lawyer to financethe case. The Company intends to make direct investment in a variety of different claims,including but not limited to the following: - property damage, defaulted debt, breach of contract, insurance, antitrust, indemnification, subrogation, environmental liability, securities, expropriation and government taking, unregistered intellectual property and other business claims (''Business Claims''); - claims and interests involving registered intellectual property (copyright, trademark and patent); and - claims in foreign (non-US) litigation and in arbitration matters. Loans to FSUS and other law firms The Company intends to use up to approximately 50 per cent. of the net proceedsof the Placing to make loans to FSUS and other law firms (which may includeother firms established by the Principals). The loans will not exceed $10million for any one case (unless specifically approved by the Board) and will beused by the law firms to finance legal fees and costs in connection with activeparticipation in claims pending in the US and foreign courts and in pendingarbitrations (through co-counsel agreements with other lawyers actively involvedin pursuing those claims or other financing relationships). Dividend policy Except in connection with the winding up of the Company, the Company isprevented under a management agreement between JIL and the Investment Manager(the "Management Agreement") from making a distribution to shareholders wheresuch distribution would result in the net asset value of the Company fallingbelow £80 million. Subject to this restriction it is anticipated that theCompany will distribute to shareholders biannually any profits generated fromits investments. Investment Manager The Company will be managed by Juridica Management Limited, a new managementcompany based in Guernsey. The Principals, who are the senior management of theInvestment Manager and partners in FSUS, will select and appropriately structureinvestments for the Company on the basis of case analysis systems and standardsbeing developed by the Investment Manager. The Investment Manager will earn operating revenues from the Company in the formof management fees and performance fees under the Management Agreement. Principals of the Investment Manager The Principals are as follows: Richard W. Fields Richard W. Fields has been a partner in several major US law firms practicing asa plaintiff's lawyer in the areas of complex litigation and dispute resolution.He focuses his practice on insurance coverage issues, complex business disputeresolution, and human rights issues. Over the course of his career, Mr. Fieldshas recovered several billion dollars for numerous Fortune 500 clients whoseinsurance claims have been disputed by insurers. His international insurancecoverage practice spans a wide range of subject matters such as productsliability, professional indemnity, environmental, asbestos, and directors' andofficers' insurance. His practice includes state and federal court litigation,international arbitration, and alternative dispute resolution. In the insurancecoverage area, Mr. Fields has represented many major oil, gas and electriccompanies and major manufacturers, among others. He is admitted to practice inNew York and the District of Columbia. He graduated from Indiana University,B.A., 1977, with High Distinction, and from Indiana University School of Law,J.D., 1982, summa cum laude. Timothy D. Scrantom Timothy D. Scrantom is an American lawyer and an English barrister-at-law(Gray's Inn)(currently non-practising). A significant portion of his practicecurrently centres on disputes, audits and investigations in internationalfinance. He also acts as a strategic consultant on legal issues in complexmulti-jurisdiction litigation and business migrations. He received a jurisdoctor (cum laude) from the University of Georgia (1983) and an LL.M. inInternational Business Law from the London School of Economics (1984). In theUnited States, he is admitted to practice in the District of Columbia, Georgiaand South Carolina. He is also a barrister before the courts of the EasternCaribbean States. Management fees The Investment Manager is entitled to an annual management fee from the Companyat the rate of 2.5 per cent. per annum of the Adjusted Net Asset Value (the netasset value of the Company at the relevant time, after accruing for the annualmanagement fee but not taking into account any liability of the Company foraccrued performance fees and after deducting any unrealised gains on investmentsand adding the amount of any write downs with respect to investments which havenot been written off) of the Company at the relevant year end. Performance fees In addition, the Investment Manager will be entitled to an annual performancefee, based on the Adjusted Net Asset Value of the Company for the relevant yearend, to the extent that one or more of the performance hurdle tests are met. Theperformance fee will equal 20 per cent. of the annualised increase in AdjustedNet Asset Value of the Company over a hurdle of 8 per cent., 35 per cent. of theincrease over a hurdle of 20 per cent. and 50 per cent. of the increase over ahurdle of 40 per cent. These fees will be subject to the condition that noperformance fee will be paid if the Adjusted Net Asset Value of the Company doesnot exceed the Adjusted Net Asset Value at the end of the previous year in whichthe performance fee was paid, a ''high water'' mark. Half of any performance fee paid will be held back subject to performanceconditions. Once these conditions have been achieved, this fee will becomepayable to the fund manager in shares of the Company. Board of Directors The Board is constituted as follows: Lord Dan Brennan, age 65 (Chairman) Lord Daniel Brennan QC is a practising barrister who specialises in commerciallaw, international business issues, public and private international law, andinternational arbitration. During 1999, he was Chairman of the Bar of Englandand Wales, the organisation that represents 10,000 practising barristers,specialist advocates and advisers in litigation and in 2000, he was votedBarrister of the Year. In May 2000, the Queen, on the recommendation of theUnited Kingdom Government, appointed him a life peer and member of the House ofLords. John Kermit Birchfield, age 67 John Kermit Birchfield was admitted to the Federal District Court of New Yorkand the Court of Appeals for the 2nd Circuit and the New York State Bar and theNew York City Bar in 1972 and has over 35 years of experience in corporatefinance, mergers and acquisitions, corporate litigation and other corporatematters. He spent the first 12 years of his career with two Wall Street lawfirms. For five years in the 1980s he held the position of Senior Vice PresidentLegal and Governmental Affairs and General Counsel at Georgia-PacificCorporation (at that time, a company listed on the New York Stock Exchange) andin the 1990s, he spent five years as Senior Vice President Legal, Secretary andGeneral Counsel at M/A-Com, Inc. (also then listed on the New York StockExchange). Since that time, he has served on the board of a number of UScompanies including HPSC Inc.(at that time, listed on the American StockExchange) and Dairy Mart Convenience Stores, Inc. (also then listed on theAmerican Stock Exchange). He is currently Chairman of Massachusetts FinancialServices Compass Group of Mutual Funds, which has approximately $10 billion inassets, Displaytech, Inc., SiteWatch Technologies, LLC and Dessin FournirCompanies. Richard Battey, age 55 Mr. Richard Battey is a non-executive director of a number of companiesincluding closed end investment funds and a private equity administrator. Afterqualifying with Baker Sutton & Co., Chartered Accountants, in London in 1977 heworked for the Schroder Group, initially in internal audit and as FinancialAccountant for J. Henry Schroder Wagg & Co. Ltd and then in Schroder InvestmentManagement in London until 1994. Mr Battey was a director of Schroders (C.I.)Limited in Guernsey from April 1994 to December 2004 where he served as FinanceDirector and Chief Operating Officer. He remains a non-executive director ofSchroder Administrative Services (C.I.) Limited. From May 2005 to July 2006 hewas Chief Financial Officer of CanArgo Energy Corporation and until end October2006 as an adviser on the preparations for the spin-out of its subsidiary,Tethys Petroleum Limited. He is also a director of the Investment Manager. For further information: Juridica Management Limited Richard W. Fields +1 (212) 277 6555 Cenkos Securities Nicholas Wells/Simon Southwood +44 (0) 20 7397 8900 Bell Pottinger David Rydell +44 (0) 20 7861 3232 Daniel de Belder This information is provided by RNS The company news service from the London Stock Exchange