Heath Lambert has pulled out of its flotation amid chaos on the stock market. Meanwhile concern is growing over liabilties the broker is facing over film finance deals.
HLF admitted: "Proceedings are complex and protracted." It added: "These proceedings are necessarily subject to uncetainty."
The lawsuits over film finance deals could cost the HLF Group £280m or more if damages are awarded.
The broker failed to set a flotation price, estimated between 325p and 375p last week and finally pulled the plug on Monday, blaming plunging stock markets
At its mid-point, the float would have raised £229m.
The company admits in its prospectus that it has "faced a marked increase in the cost of E&O insurance and has taken on a higher net E&O claims risk in the form of a higher deductible and lower maximum amount of cover than in the past".
But analyst Robin Savage of WestLB Panmure said litigation was not a serious threat to HLF.
He said market conditions made the float difficult and the company may have had difficulties selling the float at the price range envisaged.
"Investors are saying why should I commit new money now?" he said.
The company, now no longer involved in film finance business, said it would wait for the stock market to recover before resuming its IPO plans.
One industry source commenting on the law suits said the £280m estimate was "very conservative" and more cases were being started.
This was denied by the company.
And one banker close to the flotation plans said: "Film finance litigation didn't register as an issue at all."
Cases have been lodged against HLF in both the UK and US and at least one case includes claims for damages. Court costs in the US can run into millions of dollars and the £280m estimate published in HLF's flotation prospectus but is an estimate of losses that does not include court costs, interest or damages.
A House of Lords hearing later this month could be crucial in determining the strength of HLF's defence.
HLF denies all allegations by banks and film studios that it was fraudulent or misleading in drawing up policies, or failed to disclose information.
The policies were used to secure finance for movies such as The Mirror Has Two Faces, starring Barbra Streisand, and The People Vs Larry Flynt, starring Courtney Love.
One market source said investors became jittery after learning that the premium for HLF's errors and omissions (E&O) policy was very high.
It was reported to cost the company £12.9m for £100m of cover for one year.
A company spokesman said that HLF was fully covered for £280m split over a number of years.
He said the £280m estimate in the flotation prospectus had been verified and approved by teams of accountants and lawyers.
"We are not the main party to this; a number of other industry players are involved in film finance litigation."
It had planned to repay £262m of debt incurred largely during a management buy-out in 1997 and £25m to cover a pension deficit.
HLF's decision came two days after The St Paul Companies postponed its planned IPO of its new Bermuda reinsurance spin-off, Platinum Underwriters Holdings.
The deal, worth up to $1.07bn (£693m), was put on ice because of the crunch in the capital markets.
The company said it would press ahead with the deal as soon as market conditions allowed.