# 1ST Class Legal (IS) Limited (05452812)

> Why UK company 05452812 went into administration, from the administrators' statement filed at Companies House, by companydig. Interactive version: https://companydig.co.uk/company/05452812

- **Status:** Administration ended
- **Administration began:** 2017-03-01
- **Administrators' firm:** Moorfields
- **Incorporated:** 2005-05-16
- **Location:** London
- **Industry:** 65120 Non-life insurance

## Why it went into administration

- Creditor pressure / legal action

## From the administrators' statement

The Company had funded a US litigation case known as Grail Semi-Conductors, Inc. v Mitsubishi Electric & Electronics USA, Inc. (“Grail”). This was 1CL's first US case as funder and was concerned with the breach of a non-disclosure agreement. The Company had entered into four rounds of investment to fund the Grail case between August 2011 and February 2015 with a variety of different terms agreed with investors. One investment round (“Grail 700") did not involve the issuance of DLNs; instead the agreement provided (in the absence of any investor protections) for 5% of any settlement to be divided amongst the investors.

The Grail case was settled at mediation for $55m, of which $14.6m was paid to 1CL. Although this could be considered to be a successful outcome, it nevertheless was insufficient to pay investors their contractual entitlements in the event of success in full.

1CL advised investors that the settlement only allowed 1CL to repay investors’ capital plus the minimum guaranteed level of interest agreed with investors, who were asked to sign settlement agreements in respect of the sums paid. Most investors in this case accepted the settlement offered, some did not, and some of the Grail 700 investors maintained that they were contractually entitled to their share of 5% of the settlement sum. While 1CL argued that the setttement did not qualify as a success, proceedings disputing that were issued against the Company in the High Court with damages of c. £1.75m claimed together with interest.

Statement of proposals: https://find-and-update.company-information.service.gov.uk/company/05452812/filing-history/MzE3NTA1MTA0OGFkaXF6a2N4/document?format=pdf&download=0
Companies House register: https://find-and-update.company-information.service.gov.uk/company/05452812

Contains public sector information from Companies House, licensed under the Open Government Licence v3.0.