Shares in beleaguered litigation-funding firm Burford Capital (BUR:AIM), which came under attack from short-seller Muddy Waters last summer, gained 5% to 720p after it released a long-awaited update on management, governance and listing arrangements.

Burford’s last update was over three months ago and concerned suspected market manipulation of its shares rather than news on current trading or other corporate developments.

STRENGTH IN DEPTH

The firm, whose shares have lost more than half their value since Muddy Waters released its short attack document last August, today revealed a raft of senior management changes with two chief operating officers and a strengthened investment team.

In addition it aims to nominate two new directors to the board in May to replace David Lowe and Sir Peter Middleton who are stepping down in the next 18 months.

With these changes Burford believes it has ‘the deepest management bench in the industry’ and that it is ‘positioned for future global growth as the business enters its second decade.’

LISTING PARTICULARS

As previously announced, Burford is looking at listing its shares in the US, either on the New York exchange or Nasdaq, as a ‘foreign private issuer’. That would mean it can continue to file its accounts under International Financial Reporting Standards (IFRS) rather than US Generally Accepted Accounting Principles (GAAP) which requires quarterly reporting.

In order to file its registration document with the Securities and Exchange Commission (SEC) it needs to file its 2017, 2018 and 2019 accounts, in both IFRS and GAAP form.

Therefore, given that the 2019 results aren’t due to be published until 24 March, registration with the SEC is unlikely before early April and until then Burford is constrained from commenting on its progress.

There has also been talk in the past of moving the UK listing from AIM to the main market but today’s update offers no detail on a possible shift.

SENSE PREVAILS

One notably positive development in today’s update is news that the US class action suit against Burford filed last August - encouraged by the Muddy Waters ‘research document’ - has been withdrawn by the plaintiffs and ‘dismissed in its entirety’.

Moreover there is ‘no litigation pending against Burford at present other than ordinary course skirmishing within a small number of ongoing funded investment matters’.

It seemed bold in the extreme for shareholders to go after the biggest litigation funder in the business based on the flimsy case put forward by a hit-and-run short seller.

READ MORE ABOUT BURFORD HERE

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Issue Date: 07 Jan 2020