Listed legal business MJ Hudson has refused to comment on reports that it has terminated the contracts of 12 trainee solicitors.

The company’s share price has tumbled since the summer and last month it announced that chief executive Matthew Hudson had resigned with immediate effect.

His departure came two days after the MJ Hudson auditor Ernst & Young had resigned, stating in its parting letter that it had ‘lost trust and confidence in the company’s management and those charged with governance, and in their ability, along with your finance team, to provide us with accurate and reliable information for audit’.

In January, the company had stated in a trading statement that the latter part of 2022 saw a ‘slowing of fund raising activity and general transaction work for our clients which also resulted in lower activity for the related business units’.

The board, it was confirmed, would look at areas to reduce costs as well as measures to strengthen the balance sheet and improve the free cash position. Interim chief financial officer Ran Oren was appointed to run this process and assess restructuring opportunities.

The Lawyer this week reported that MJ Hudson was terminating 12 contracts at the end of this month for trainee solicitors at different stages of their contracts. It is understood that seven of these trainees were six months away from qualifying.

Recruitment consultant Jessica Brooker posted on LinkedIn yesterday that she had been contacted by trainees – believed to be from MJ Hudson – seeking alternative firms to complete their training contracts.

After being approached, a spokesperson for MJ Hudson said the company would not be commenting.

In a statement to the London Stock Exchange, it did announce a new loan agreement with its existing senior lender to provide a further short term overdraft facility of £1.75m in order to provide additional working capital. The short term facility will bear 5% interest plus the Bank of England’s base rate per annum, plus additional fees as agreed with the senior lender.

The company began as a law firm before branching out into asset management, but still holds itself out as a ‘strong alternative to the magic circle and white shoe institutions’. It practices finance and restructuring, M&A and corporate, private funds and venture law.

 

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