sold<\/strong><\/a>\u00a0to Manchester firm AWH Legal in the autumn, has assets of \u00a33.4m \u2013 around half of which is made up of money that can be made from work in progress.<\/p>\nBut that figure will pay off only a fraction of the \u00a34.25m owed to the bank and \u00a322.5m owed to private equity investors. Unsecured creditors, who are collectively owed around \u00a313.8m, stand to get nothing. These include trade and expense creditors, owed \u00a3940,000, medical fees of \u00a36m, and counsel and other legal advisers owed \u00a32.4m.<\/p>\n
The notice of administrator\u2019s proposals, filed with Companies House this week, suggests the downfall of the business was brought about by a dispute with the firm\u2019s provider of after-the-event (ATE) insurance.\u00a0According to the notice, this ‘took the directors\u2019 focus away from the management of the business.\u00a0The dispute restricted payments due under the terms of the ATE policies and therefore payments due to third parties that typically would have been paid under the ATE were settled by the company.’<\/p>\n
This caused ‘significant cash-flow issues’, further compounded by a counter-claim from the insurer.<\/p>\n
Insolvency experts drafted in said Roberts Jackson’s management would be unlikely to resolve legacy issues with creditors and that working capital was insufficient to meet liabilities. A decision was taken that it was not possible to continue to trade, particularly given the risk of regulatory action.<\/p>\n
Immediately following the appointment of administrators, a pre-packaged sale of the business and assets was completed to AWH Legal, with 93 staff transferred.<\/p>\n
The administrator’s notice, prepared by Sean Bucknall and Andrew Hosking of Quantuma LLP, states that there is insufficient property for a distribution to unsecured creditors. Consequently they are not being asked to decide on the proposals.<\/p>\n
Administrators said the Solicitors Regulation Authority was satisfied with the sale, the business has avoided making staff redundant, and the sale to AWH Legal represents the best value for creditors and best prospect for recouping some money.<\/p>\n
Details of the opportunity to buy the business were issued to 22 firms identified as potential interested parties: 14 non-disclosure agreements were issued and three offers made.<\/p>\n
AWH has paid \u00a3500,000 in advance and will pay 10% of all profit costs and success fees from settled cases included in the work in progress, which has a book value of \u00a314.8m.<\/p>\n
Roberts Jackson, established as a personal injury firm in 2009 by Karen and Oliver Jackson, specialised in industrial disease claims. The firm operated from a base in Cheshire and employed around 130 people.<\/p>\n
External investment came in August 2014 when NorthEdge Capital acquired 43% of the issued share capital in a deal valued at \u00a314.9m.<\/p>\n
Finances continued to be healthy up to 2015\/16, the last year that accounts were published, with reported profits doubling to \u00a31.53m and turnover still almost \u00a311m.<\/p>\n<\/div>\n
\n
Source link <\/a>
\n![\"\"](\"http:\/\/dominiclevent.com\/blog\/wp-content\/uploads\/2017\/01\/footer-300x100.png\")
<\/a>
\n