Stricken legal firm Slater and Gordon is planning a $1 billion claim for fraud against the company from which it acquired its troubled UK business.
Slater and Gordon said in a statement to the ASX on Friday it plans to file a claim against Watchstone Group for PS600 million in the High Court of England and Wales over the coming weeks.
Slater and Gordon was dragged to the brink of bankruptcy by the 2015 acquisition, posting a $1 billion loss in 2015/16, mostly due to writedowns related to the UK business formerly known as Quindell.
"The claim is based upon serious allegations against Watchstone and its then senior management, including fraud, concerning the purchase by S&G of Watchstone's Professional Service Division in 2015," Slater and Gordon said.
Slater and Gordon, whose lenders have sold on its huge debts to new creditors, said it will pursue the claim vigorously.
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Shares in the struggling legal firm slumped by more than 99 per cent between April 2015 and March this year, falling from $8.07 to 6.5 cents.
At 1152 AEST on Friday, they were up 2.2 cents, or 25 per cent, at 11 cents.
