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The company's shareholders are chasing compensation for the massive drop in the firm's value following its disastrous $1.3 billion acquisition of British professional services firm Quindell in 2015.
Slater and Gordon announced its shares, which traded at just over $8.00 two years and are now worth just 7.4 cents, will remain in a trading halt until at Wednesday or when an announcement is released to the market.
Ever since Slater and Gordon purchased Quindell, the company has been beset by legal troubles which have resulted in an unprecedented share price drop which shaved around 98 per cent off its total market cap.
Not only has the company been forced to enlist an army of secondary debt buyers in order to stay afloat, it is also the subject of a class action lawsuit brought by Maurice Blackburn on behalf of aggrieved SGH shareholders.
Slater and Gordon is also facing a second class action from another rival firm Johnson Winter & Slattery (JWS), one spearheaded by shareholder Babscay Pty Ltd.
Slater and Gordon, meanwhile, has filed its own lawsuit against UK-based Watchstone Group over the sale of Quindell.
The Melbourne-based firm is suing Watchstone in the High Court of England and Wales, alleging that the company and its senior managers made "fraudulent misrepresentations" surrounding the sale of Quindell.
With the company engaged in multiple law suits, its boss Andrew Grech (pictured) stepped down last month and a board cleanout is underway as part of a major restructuring process that gives control to its lenders.
Under a binding recapitalisation agreement, Slater and Gordon's lenders will gain approximately 95 per cent of the company's equity, enabling them to appoint a whole new board with Grech also out of the picture.
All existing directors will resign but Grech will remain a non-executive director of the company temporarily until a replacement can be found.
Hayden Stephens, CEO Australia, and Ken Fowlie, CEO UK, will continue to lead Slater and Gordon in Australia and the UK.
The recapitalisation agreement is between Slater and Gordon and its lenders, led by Anchorage Capital, who represent over 75 per cent of its secured debt by value and over 50 per cent of the number of secured lenders.
Business News Australia
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