Cobbetts calls in the administrators
LAW firm Cobbetts is set to enter administration, TheBusinessDesk.com can reveal.
The Manchester-based firm, which has nearly 500 staff and offices in Birmingham, Leeds and London, has filed a notice of intention to appoint administrators and will be put up for sale. Staff were informed of the news this morning.
Cobbetts, which saw a merger with DWF collapse last year, reported fee income of £45.2m in the year to the end of April 2012. It has debts of more than £10m.
It blamed continued tough trading in the professional services sector for its demise.
In a statement the firm said: “Having regard to the difficult trading conditions in the professional services sector we have reluctantly concluded that the appropriate course at this time is for the firm to obtain the protection of an interim statutory moratorium to enable a sale of the business and assets of the firm to be concluded in a short time frame.
“We are also working closely with our regulator, the SRA. with all stakeholders and our professional advisers to achieve the best outcome for creditors, clients, employees and members.
“We remain confident that we will be able to provide a further positive update in the very near future.”
The fall of the firm is the most high profile failure in the legal world since Halliwells in 2010, which was acquired in a pre-pack administration by several firms including Birmingham-based Gateley, Hill Dickinson and Barlow Lyde & Gilbert.
Cobbetts had 493 staff in 2010-11. Latest filed accounts for the year to April 2011 show pre-tax profits dipped 5% to £9.9m. Net debt stood at £10.5m, with bank loans representing £6.4m.
On January 22 the firm filed details of new terms with its secured lender Lloyds. It was due to file accounts for the year to April 2012 on January 30.
The firm’s Birmingham office at No.1 Colmore Square is headed up by Graham Muth.