LECG Corp. (XPRT), a supplier of independent expert testimony and authoritative studies, Friday released several updates relating to the selling-off of its practice groups as the company prepares to wind down its business. Most of the less-than 70 employees are expected to leave within the month. Currently the shares are up more than 20 percent on more than average volume on the Nasdaq.
The company also received a non-compliance letter from Nasdaq's Listing Qualifications Department regarding the failure to maintain a minimum bid price of $1 per share. In response, LECG said it does not intend to "resolve the deficiency", and may itself request delisting. The shares will be delisted if the company cannot achieve compliance with the rule prior to September 26, 2011.
Further, the company said it completed the sale of the company's European forensics, economics and tax practices to FTI Consulting Inc. (FCN) for approximately $25 million, of which liabilities make up about $6 million. This transaction affects 100 professionals in various European cities.
Also expected today are the closure of other practice sales, including that of LECG's UK-based business consulting practice, Oregon-based retail securities practice and insurance tax and actuarial practices. Huron Consulting Inc. (HURN) has been named as the buyer of the legal technology practice.
An exchange transaction with Great Hill Equity Partners III LP and Great Hill Investors, reported today, involves the conversion of over 3.75 million preferred shares to common shares.
Adding the 54 million-odd newly issued common shares, the Great Hill entities now own 71% of LECG common stock with a liquidation preference of $10 million.
Proceeds from the various deals have been used to retire most of the company's senior secured debt along with interest and fees. There is no value, present or anticipated, for the common stockholders from the divestment.
XPRT is currently trading up by $0.04, or 20.04 percent, at $0.2419 on a volume of 13 million shares on the Nasdaq.
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