Business
Successful settlement in the Carillion claim
Successful settlement in the Carillion claim.
About this update from Litigation Capital Management Ltd
[{"type":"text","content":"\n \n \n 20 February 2023\n \n \n \n \n \n Litigation Capital Management Limited\n \n \n (\"LCM\" or the \"Company\")\n \n \n \n \n \n Successful settlement in the Carillion claim against former auditors KPMG\n \n \n \n \n \n Litigation Capital Management Limited (AIM:LIT),\n an alternative asset manager specialising in dispute financing solutions internationally,\n is pleased to\n announce a successful outcome on its Carillion claim (\"the claim\").\n \n \n \n \n \n On 19 May 2021 LCM announced it had entered into an agreement to provide a litigation finance facility to fund a claim in the Commercial Court of the High Court of Justice of England & Wales against the Carillion group's former auditors, KPMG. The claim arose from KPMG's conduct of its audits of the Group's financial statements for the period 2014 to 2016. The\n claim\n was funded directly from LCM's balance sheet (25%) and from the LCM managed\n Global Alternative Returns Fund (\"Fund I\") (75%)\n .\n \n \n \n \n \n A confidential settlement was reached between the parties and as a result LCM is expected to receive the following returns after an investment period of 25 months:\n \n \n \n \n \n \n \n \n \n $AUDm*\n \n \n \n \n LCM balance sheet\n \n \n \n \n Fund I\n \n \n \n \n \n \n Invested capital (A)\n \n \n \n \n 2.3\n \n \n \n \n 6.8\n \n \n \n \n \n \n Investment return (B)\n \n \n \n \n 3.1\n \n \n \n \n 9.5\n \n \n \n \n \n \n Total Revenue (A+B)\n \n \n \n \n 5.4\n \n \n \n \n 16.3\n \n \n \n \n \n \n Performance fee (C)\n \n \n \n \n 3.2\n \n \n \n \n (3.2)\n \n \n \n \n \n \n \n Gross profit\n \n \n \n \n \n \n 6.3\n \n \n \n \n \n \n 6.3\n \n \n \n \n \n \n \n \n ROIC\n \n \n \n \n \n \n x 2.78\n \n \n \n \n \n \n x 0.9\n \n \n \n \n \n \n \n \n \n \n \n \n \n *The figures above are subject to change based on the receipt of cash and FX rate at the time\n \n \n \n \n \n \n This is the first investment from Fund I that has reached settlement. The Company received a $AUD 3.2m performance fee from Fund I as a result of the settlement.\n \n \n \n \n \n Carillion was the largest corporate collapse in the building and construction industry in UK history and we are pleased to have supported the underlying creditors who suffered financially from the collapse.\n \n \n \n \n \n \n Patrick Molon...