Outrage in U.K. Over Claims Direct Share Sale

September 3, 2001

By applying the old merchants’ rule, “buy it for a nickel, sell it for a dime,” a bit too opportunistically, Colin Poole and Anthony Sullman, the original founders of the U.K.’s Claims Direct, have gotten themselves in hot water with former shareholders, and provoked calls for an investigation.

Just three weeks after the two regained control of the troubled company in a private buyout for 10 pence (about 14 cents) a share, they turned around and sold 49 million shares to British entrepreneur Simon Ware-Lane, who operates Claimline, a rival claims settlement service, for 16 pence (about 23.2 cents) a share.

Their profit, around $4.5 million, has outraged former shareholders, who paid $2.60 for the initial offering last year, and as high as $5.20, and brought on calls for an investigation.

Ware-Lane, who also holds options to acquire the remaining shares, told the BBC that he was simply interested in providing a service to individuals to access the justice system, based on the merits of a personal injury case, and not on their ability to pay.

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