Breaking News: Crisis-hit Halliwells planning for administration
DEBT ridden law firm Halliwells is set to go into administration in the next week, it emerged today.
The firm, which has offices in Manchester, Liverpool, Sheffield and London, owes Royal Bank of Scotland around £20m.
It filed a Notice of Intention to Appoint an Administrator at the Company’s Court yesterday, HM Court Service confirmed to TheBusinessDesk.com this morning.
The notice means that Halliwells now has five days grace before having to appoint an administrator.
Sources believe its assets are likely to be picked up by rival Hill Dickinson. Barlow Lyde & Gilbert is also reportedly eyeing the situation with interest.
In a statement today the firm said: “Halliwells LLP is in advanced discussions for the transfer of the business in its entirety to another highly regarded firm of solicitors due to events that have adversely impacted the finances of the firm.
“These are the result of high property costs exacerbated by the current economic climate which affected the profitability of the firm. The underlying business remains strong and has attracted interest from a number of parties.
“To provide Halliwells LLP with a period of stability to facilitate this transfer the firm has entered into a moratorium to protect the interests of clients and other stakeholders and to ensure business continues as usual. The moratorium has been obtained by filing a notice at court on 24th June 2010.”
The crisis at the firm – which has an opulent headquarters in Spinningields business district in Manchester – will send shockwaves through the legal landscape.
Rumours that the firm was in dire financial trouble have intensified in recent days.
Halliwells has been hit hard by the recession. Turnover and profits were down in its most recent accounts, and is thought to have fallen further still in the year to the end of April this year.
Its last filed accounts for the year to April 30, 2009, showed profits for division among members had dropped from £23.4m to £17.05m and its income had fallen by 5% cent to £77.8m. Net debt had risen by £780,000 to £25.4m
This debt figure and the lease on its Hardman Square office has also weighed-heavily on the business, which has seen a number of leading partners leave to join other firms in the last 18 months.
Hill Dickinson is likely to move to the Spinningfields office as part of the transaction, sources in the North West legal community have said.
It is thought that experienced insolvency practitioner Dermot Power of BDO will be appointed on what will be a very complex case.
A multi-million pound payout shared by the firm’s equity partners after they received a ‘golden carrot’ from Spinningfields developer Allied London for agreeing a 25-year lease, is said to have sparked huge resentment from the younger partners in the firm.
Since November 2008 around 40 partners have left, according to Companies House records.
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