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Healthcare Locums PLC (HCL:LSE) this morning provided an the following update on the proceedings commenced against it in the United States.
As reported to shareholders on 11 July 2012, following the voluntary dismissal of the proceedings in the United States District Court for the Southern District of New York ("the SDNY Court"), a Summons and Complaint were again filed against the Company and some of its former directors, this time in the Supreme Court of the State of New York, by Permian Master Fund, LP; Permian Investments Partners, LP; Arundel Capital LLC; Arundel Long Fund LP; Arundel Hedge Fund LP; Privet Capital, LLC and Flinn Investments, LLC ("the Plaintiffs"). The Summons and Complaint have now been served on the Company.
The Plaintiffs have not given the Company any reason or explanation for the voluntary dismissal of the proceedings in the SDNY Court.
Whilst proceedings have been re-commenced in the Supreme Court of the State of New York, the only connection with the US is that the majority of the Plaintiffs are based there. Having considered the matter very carefully with the Company's legal advisors the Board has decided the Company will not submit to the US jurisdiction by filing a defence. In arriving at that decision, the Board has considered (amongst other things):
- The company is incorporated in England with its shares listed and traded on AIM, a part of the London Stock Exchange.
- Its actions are governed by English law and the listing and trading of its shares on the London Stock Exchange are regulated by the rules of that exchange.
- The former directors named as defendants in the proceedings were directors of an English company and their powers, duties, obligations and liabilities were regulated by English law.
- The subject matter of the alleged acts relate to events in England.
- The Company does not operate in the US and has no assets in the US.
The Company has been advised by English Leading Counsel that if the Plaintiffs continue the US proceedings and secure a default judgment it is highly unlikely that any judgment would be recognized or enforceable in either the UK or Australia because of lack of jurisdiction in the US.
Accordingly, our legal advisors have today written to the Plaintiffs' US counsel confirming that the Company does not propose to respond to the US proceedings and informing them that, if they wish to pursue a claim, they should do so in the proper forum, namely, the English High Court of Justice. The Plaintiffs' US counsel have also been informed that the Board consider the underlying claim to be wholly without merit and that if proceedings are commenced in the proper forum they will be strenuously defended.
In trading this morning HCL share price rose +23.29% to £2.25 although this is still 97.63% lower than it was a year ago.