The Board of JustKapital Limited announced the confidential settlement of a case it has funded. The settlement is subject to approval of The Federal Court of Australia which is likely to occur in the first half of calendar 2018.
This case was one of the three cases retained by the Company and is the Company’s first successful settlement. As announced on 8 December 2017 and 4 December 2017, subject to various conditions including shareholder approval, the Company has entered into an agreement to sell its litigation portfolio to an entity associated with Mr Philip Kapp. As part of these arrangements, the Company appointed entities associated with Mr Kapp to negotiate a settlement of this case for 35% of the net proceeds (see the 8 December 2017 announcement for full details). The Company will retain management of the remaining two cases.
If the Court approves the settlement, the Company expects to recognise revenue of approximately $3 million from this investment and generate a profit after capitalised overheads of approximately $1.3 million (including the 35% fee referred to above). Please note this revenue and profit were not included in the Company’s updated forecast released on 4 December 2017 and therefore, if the settlement is approved, the Company expects to incur a loss of around $3.7M.
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