Litigation Capital Manag... Share Discussion Threads

[bigbaggy] 17/12/2021 14:49

Typo56 - good points, thank you. It certainly didnt hit 175p.

"three years minus 2 days" - ouch !! I didnt appreciate that lol !

[typo56] 17/12/2021 14:41

I don't see it meets either of these two conditions:-

"Nicholas Rowles-Davies JSOP award will vest on the date three years post award, subject to continued employment and a performance condition of a share price target of 175 pence being achieved at any time during the vesting period."

I dare say it's not insignificant that LIT was admitted on 19 Dec 2018. Three years ago, minus two days!

[bigbaggy] 17/12/2021 14:36

Typo56 - it wont be that simple. NRD will claim wrongful dismissal and want the shares to vest, plus I suspect damages after all the commentary on this we are seeing. LIT will say: "bad leaver - no entitlement". Then the lawyers get to work!

[williamcooper104] 17/12/2021 14:34

Yep and it's a huge incentivisation for a bad leaver rather than a hush hushed up outcome The dilution implied will still be borne as someone will need to take his place but at least we aren't getting double hit on it Had previously sold LIT but couldnt resist jumping in this morning on expense dodgyness and an 18 drawdown

[typo56] 17/12/2021 14:23

Thank you paradigmaus. In other words it's not correct that he owns 4.9m shares, is it?

[adae] 17/12/2021 13:34

The co have told us next to nothing, what do you think Mr Rowles-Davies' view of it is going to be? My guess is - somewhat different.

Supposedly not material, but bad enough for instant dismissal, but not picked up on previously?

I'd say LIT is uninvestible until they tell us what has actually gone on.

Typo56 - haven't looked in depth, but he's clearly a 'bad leaver', which might wipe out his rights to any unvested shares (ie all of them).

Alternatively, if he can find a good litigation funder....

[74tom] 17/12/2021 13:31

Haha, maybe edit that slightly to a pattern of behaviour which had become clear after investigation?! Depends how you want to spin it...

[stockstockham] 17/12/2021 13:27

That's likely true, but what will the shareprice have sunk to by spring next year.

Doubt very much we've heard the full story yet. Gross misconduct dismissal has got to be serious - it's not just chucking a few extra taxi receipts into expenses.

Someone knows, and it's not shareholders.

[tradertrev] 17/12/2021 13:26

a pattern of behaviour going back several years without sanction would appear to be acceptance of that behaviour, lawyers would no doubt argue!

[paradigmaus] 17/12/2021 13:25

2019 Annual Report page 93:

"a) Mr Rowles-Davies has been continuously employed by the Company from the Grant Date to the date that is 36 months after 19 December 2018 and has been continuously been employed by the LCM Group over that period; and

b) The Company's shares is at least £1.75 per share at any time during the vesting period (Share Price Target)."

[74tom] 17/12/2021 13:06

NRD doesn't appear to own a single vested share;



P106, he has two tranches of options, 4,528,664 with an exercise price of £0.52 and another 388,800 at £0.7394.

Not sure about any black holes, Patrick Maloney made it clear in several presentations this year that every investment has to be signed off by 6 partners as this is key to maintaining their historic performance levels, so there is minimal risk of NRD doing anything that would put the company at risk of failure.

The other thought I have is whether this has been brewing for some time? We know that PM has wanted to relocate to London but been stopped by Covid. Was this at least partly because he wasn't satisfied with NRD's performance or behaviour and wanted clearer oversight? I also say this because I would be very surprised for a chairman to be sacked for gross misconduct due to an isolated incident. Far more likely is a pattern of behaviour going back several years which has been monitored for some time to gain irrefutable evidence before pulling the plug...

[stockstockham] 17/12/2021 12:55

LIT is one of Simon Thompson's tips, be interesting to hear what he has to say about it.

And what Rowles-Davis's response is. Somehow "You got me, guv" seems unlikely.

[leadixon] 17/12/2021 12:55

this is not good news, given how much experience he had in the market and in leading such a large portion of their geographic portfolio, i'd definitely like to know more about how they'll manage the transition.

Agree though that they seem to have dealt with it in a very swift and professional manner.

[nchanning] 17/12/2021 12:23

If NRD has just spent 50k putting up prostitutes at the Ritz on the company credit card , can't help thinking it would have been simpler to say 'NRD has left the company to pursue other opportunities.' But perhaps it's worth doing the right thing to claw back the share options from our light fingered friend , even if it is a tad embarrassing for the company .

[typo56] 17/12/2021 12:02

So under the JSOP, does he have physical shares to sell, or is this effectively a form of derivative? It's beyond my brain grade.

Joint share ownership plan ("JSOP")
The Company has in place a JSOP. Ordinary Shares in the capital of the Company ("Ordinary Shares") issued under the JSOP ("JSOP Shares") are held by the LCM Employee Benefit Trust ("EBT"), which was established for this purpose. beneficial interest in JSOP Shares is jointly held between the relevant participant and the EBT. Under the JSOP rules, it has been agreed that no voting rights will be exercised on the JSOP Shares prior to their vesting date.

A limited recourse loan agreement will be entered into between the Company and both the EBT and recipients of JSOP Shares. The loan will be for a term of 10 years and an amount which represents the market value for the recipient's interest in the JSOP.

As part of a Long Term Incentive Plan (LTIP), Nicholas Rowles-Davies JSOP award will vest on the date three years post award, subject to continued employment and a performance condition of a share price target of 175 pence being achieved at any time during the vesting period. In addition, the JSOP award is subject to malus and clawback provisions. The award vests in full in the event of a change of control at any time.

In addition, Nicholas Rowles-Davies was granted a JSOP award on 8 March 2019 to allow him to participate in the growth of 4 per cent. of LCM's share price appreciation over the share capital on issue immediately post admission to AIM. The grant on 8 March 2019 only gave Nicholas Rowles-Davies a participation in 3.85 per cent. and to address that shortfall, an additional 181,147 Ordinary Shares will be subscribed by the EBT on the same terms as the original award. Please refer to the Company's RNS on 8 March 2019 titled JSOP Award for additional details.

Pursuant to the JSOP rules, recipients will benefit from the growth in value of each JSOP Share from the LCM share price at the point of issue subject to the conditions outlined above.

[robsy2] 17/12/2021 11:47

Thats s very good post Baggy, wish i’d read it before i bought some more.

[typo56] 17/12/2021 11:46

It looks to me as if those £4.9m shares shown in Stocko may be JSOP share options and have never been exercised. Is that correct?

I must say, I don't find the JSOP and CSOP incentivisation easy to fathom out.

[hpcg] 17/12/2021 11:31

The offer is presumably driven by Rowles-Davis chucking out everything he can? There is some uncertainty as to the quantum of his entire holding, could be up to 4.9% but I imagine he will be disqualified from just about anything that hasn't vested yet.

[typo56] 17/12/2021 10:32

I'm sure Stockopedia is mostly accurate but I'd prefer to rely on direct information where possible. It's not clear to me from the Annual Report if he actually owns those shares yet. I can't find any holdings RNS relating to him either. Perhaps need to go back to the Admission Document for the info, but they seem to have killed the link to it.

[bigbaggy] 17/12/2021 10:29

In my opinion, I agree with Tradertrev. NRD headed up Vannin which was a disaster and pulled its IPO, then he lasted less than a couple of years at Burford, then his own venture Chancery lasted less than a year I think, before joining LCM. He was meant to spearhead "Corporate Portfolio" deals from all the investor videos I have watched since the IPO. These are cash intensive and tend to be lower margin (spread of risk, in theory at least). I think the deeper question here is what financial commitments has he signed LCM up to when he cant be trusted with his own expenses. He was Deputy Chairman and headed up LCM outside Oz and therefore had a lot of power. Major red flag for me, there could be blackholes to be uncovered. All imho and as ever dyor but like Tradertrev I am now on the sidelines.

[typo56] 17/12/2021 09:50

I'm still not clear how many shares he actually holds. The annual report has him down as 4.9m under the Joint Share Ownership Plan and these are "exercisable at various prices and subject to vesting conditions". Does that mean he's exercised the entitlement in these shares, or is potentially entitled to exercise them, subject to conditions?

[tradertrev] 17/12/2021 09:45

IMO only, but NR-D departure makes this share investible for the first time. However, he was hired to help LIT break into the London market, which appears not to have been done (the quality of what he has achieved for LIT has to be in question given this development).
Given the JSOP I doubt he will go without a fight and the shares how have to be valued in the light of reduced expectations for performance in the London market (until they find a better person to lead here) and what the financials will look like as and when they inevitably move to FV accounting (i.e. without capitalisation of operating costs).
Still on the sidelines, but much more interested now.

[robsy2] 17/12/2021 09:42

I’ve topped up at 89p. I had trimmed my holding a few weeks ago just to take a bit off the table in what looks like a poor general market, but as was said earlier,it its already well of the high anyway so buying at this level could be seen as a bargain opp in a few years time.

[reetyorky pud] 17/12/2021 09:36

Would make sense if he is a forced seller today. Massive volume at over 13 times average daily volume gone through already and it's only just 9:30am.