Euro 1 Million plus unpaid from Worldspreads customers

One interesting declarations derived from the recent Alternative Investment Market (AIM) listing of Worldspreads, a spread betting company, was reported by the Irish publication Sunday Business Post over the weekend.

Worldspreads is currently in litigation to recover over Euro 1 million from 2 debtors. The company has taken High Court measures against one debtor who owes the company Euro 550 thousand, while a second person owes WorldSpreads Euro 519 thousand.

The numbers are noteworthy, given that WorldSpreads made a profit of Euro 530 thousand on proceeds of Euro 6.6 million last year. Although the potential for much more is possible, these issues are detrimental to the company and its new shareholders.

Details of the company's litigation are part of the AIM admission document. The Irish litigation apparently goes as far back as October 2005, when the company started High Court measures after a ‘‘debtor's account became indebted for approximately Euro 550 000. This matter is ongoing, notice of trial has been served and counsel must now certify the matter ready to proceed to trial," as reported in the document.

The second case started in March 2007. ‘‘A claim was issued against a customer of the group in the High Court in England to recover Euro 519 000 owed by the customer to the group pursuant to unsuccessful spread-betting transactions. No defense was filed by the defendant and an application for judgment in default was duly made and granted by the High Court on 21May 2007."

It appears the company is starting out with two strikes against them in the investment world. Although taking solid steps to recovering the money may prove to be their bounce back factor, the company may already be losing confidence from the market, and their briefly traded shares will show what the investors think of the litigation.