EYE NEWSFLASH: Major blow for Purplebricks as legal row puts Strike deal in jeopardy - London Wallet

Contractors for Justice (C4J) has this evening announced that it is stepping up efforts to follow through with a proposed Group Litigation Order (GLO) against Purplebricks, on behalf of former agents that were hired as self-employed estate agents by the company, which could block any potential sale of the online estate agency; potentially disastrous for the firm given its current financial position.

The premise of the claim is that, in law, these self-employed agents were in effect employed for the purposes of holiday pay and pension contributions being owed by the company to the individual. The claim is for as much as 20.7% of each person’s total earnings.

C4J has compiled two letters today in relation to the Purplebricks ’self-employed’ claim.

The first letter is written to Helena Marston, Purplebricks’ CEO. This sets out that the online estate agency has been given six days notice to begin settlement negotiations with regard to the proposed C4J claim on behalf of 192 claimants in a claim that is valued at £8,439,673.

The amount of money being pursued is the amount with interest that C4J are claiming for the 192 individuals regarding PB’s alleged non-payment of employees’ holiday pay, car allowances and pension contributions whilst self-employed.

The contention is that these self-employed claimants were, in fact, employed in the eyes of the law. Failing this, C4J will be issuing proceedings in the High Court from midday on 1st June.

The second letter, is related correspondence but separate. This is a letter sent today to the Takeover Panel by C4J which seeks to ask the Panel to intervene in the proposed sale to Strike and to prevent it from completing (for now in any case).

This is on the legal basis that on 10th May Strike issued a ’no intention to bid’ notice under Rule 2.8 of the Takeover Code. They are subsequently legally prevented from submitting an offer within six months from that date, As a matter of fact they have submitted an offer and this is therefore considered unlawful and C4J are seeking its reversal.

“This is a real double blow for Purplebricks as it continues to wriggle quite helplessly on the hook,” said Russell Quirk, the PR acting for C4J

He continued: “Not only will Purplebricks face an aggressive ramping up of litigation from a High Court action from next Tuesday afternoon, but they also face the catastrophic prospect of having to reverse or, at best, stay the sale to Strike for six months if the Takeover Panel enforce Rule 2.8 as they are fully expected to have to do.

“It’s doubtful that Purplebricks would survive a further six months given their haemorrhaging cash reserves versus overhead. They would be advised to run toward the C4J negotiating table at speed therefore.”

Purplebricks has received a takeover offer from its major shareholder earlier today, a week after saying it had agreed to sell its business and assets for £1 to online rival Strike.

The struggling online estate agency said the new proposal came from investor Lecram Holdings, which has previously criticised the group’s leadership.

The offer is to acquire the entire issued, and to be issued, share capital of Purplebricks at a price of just 0.5p per share.

But the firm said it does not recommend Lecram’s offer to shareholders.

“The board does not currently consider that the proposal reflects an improvement on the proposed sale of business and assets to Strike,” Purplebricks said.

Lecram, which owns a more than 5% stake in the beleaguered firm, called for the removal of chairman Paul Pindar last year, and the appointment of property industry expert Harry Hill.

A spokesman commented: “Lecram has been engaged with the board of Purplebricks for nearly a year in an attempt to avert the situation that has now occurred and we believe our offer gives shareholders the certainty of cash now, rather than vague promises from a discredited board of something more somewhere down the line.”