Cobbetts’ liabilities topped £90m
FAILED law firm Cobbetts had total liabilities of £90.1m, of which £74.4m related to property leases, a report by administrators KPMG reveals.
While secured creditor Lloyds Bank is set to recoup £2.5m of the £7.3m it had lent the firm, unsecured creditors including the landlords of properties in Manchester, Birmingham, Leeds, and London, and HMRC and other funders, are unlikely to see substantial returns.
A number of leading professional service firms, including Deloitte, property advisers DTZ and Jones Lang Lasalle are among the worst hit creditors. All were owed more than £100,000.
The Co-operative’s Travel Management arm was owed more than £70,000, while smaller businesses and organisations such as Manchester marketing agency MC2, recruiter BCL Legal, Marketing Manchester, and the British Venture Capital Association are also on the creditors’ list, along with former managing partner Michael Shaw.
Cobbetts went into administration in January after a severe downturn in trading in late 2012. A pre-pack deal with DWF, with whom it had previously held merger talks was soon announced, a move which saved more than 430 jobs, although around 40 posts have since been made redundant.
According to the administrators’ report from KPMG, DWF paid a minimum of £3.9m for Cobbetts’ assets including work in progress and net debtors.
In addition an upside agreement has been agreed between DWF and the administrators, whereby any debtor realisations over £9.4m will be split on a 25/75 basis.
KPMG is holding a meeting for creditors in Manchester in April 10 at 11am at the Freemasons’ Hall on Bridge Street.
