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EDITIONS
Wednesday, 10 July, 2002, 13:04 GMT 14:04 UK
Claims Direct goes bust
Claims Direct is expected to unveil 22m of losses
The struggling personal injury group Claims Direct is to apply for an administration order in the High Court later on Wednesday after running out of cash.

The company said it had decided to go into administration after attempts to raise urgently-needed extra funding fell through.

"I am extremely disappointed that in my short time with the company all the hard work and sacrifices made by Claims Direct staff have not been rewarded," the company's chief executive Ronnie Henderson said.

The statement came hours after trading in Claims Direct shares was suspended on the London Stock Exchange.

If an administration order is granted, Claims Direct will continue to trade as normal while court-appointed administrators explore ways of restructuring the loss-making company, or selling it off.

Job loss fears

A spokesperson said it was too soon to say whether the company's 140 staff would keep their jobs.

Claims Direct is expected to unveil losses of 22m ($33m) for the year to 31 March, up from 20m the year before.

The company, which handles compensation claims on behalf of accident victims, has attracted fewer than expected new cases.

It is also struggling to recover from a wave of bad publicity earlier this year when it emerged that Claims Direct's fees had eaten up most of some claimants' compensation awards.

Claims Direct, modelled on US personal injury firms, was one of the first companies in the UK to take on accident compensation claims on a "no win, no fee" basis.

The company's shares, which peaked at about 350 pence in September 2000, were frozen at just 3.25p on Wednesday.

See also:

28 Mar 02 | Business
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19 Jun 02 | Business
10 Jul 02 | Business
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