Landlords and funders to miss out following Cobbetts collapse
FAILED law firm Cobbetts had total liabilities of £90.1m – of which £74.4m related to property leases, a report by administators 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 the properties in Manchester, Birmingham, Leeds, and London, HMRC and other funders are unlikely to see substantial returns.
A number of leading professional service firms, including Deloitte and 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 owned more than £70,000, while smaller business and organisations such as marketing agency MC2, recruiter BCL Legal, and the British Venture Capital Association are also on the creditors’ list.
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.
The statement of adminstrators’ report from KPMG report 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 administartors, whereby any debtor realisations over £9.4m will be split on a 25/75 basis.
