Wolstenholmes collapse costs £10m
THE BILL for clearing up the mess caused by the collapse of Stockport law firm Wolstenholmes could eventually top £10m.
A report filed by the Wolstenholmes’ administrators, Manchester-based Berry Insolvency Partners, shows that the Solicitors’ Regulation Authority (SRA) expects that its costs in refunding former Wolstenholmes’ clients, getting an intervening solicitor (DWF) to finish the work and investigating the company’s affairs are likely to be in the region of £7.5m to £10m.
The SRA has managed to recoup £4.5m of this – £4m from Wolstenholmes’ former client account and £500,000 from work completed by the intervening solicitor. However, the regulator will suffer a shortfall of at least £3m – the bill for which will fall on the wider legal market.
Administrator Stephen Berry’s report shows there was a “minimum shortfall” of £314,000 from the Heald Green-based firm’s client account at the time of the SRA’s intervention.
Moreover, it owed a further £3.5m to other creditors who are unlikely to receive any payment. These include 37 former staff were owed more than £100,000 and its bank, Lloyds TSB, which was owed £350,000.
It had also provided financing to the partnership for a Porsche Cayenne – the whereabouts of which is currently “unknown”, according to the administrator.
Manchester-based property developer PPMCR (which is also in administration) is also owed £1.5m after Wolstenholmes failed to defend a negligence claim it submitted last year.
Wolstenholmes was closed down following an intervention by the SRA in December following scores of complaints from the firm’s former clients. The SRA suspended the practicing certificates of five former Wolstenholmes partners.
Three of the five suspended – Nasir Ilyas, Helen Murgatroyd and Bobby Shabbir – do not have current practicing certificates.
However, Bilal Khawaja and former managing partner Imran Hussain have both been granted certificates to practice subject to a strict set of conditions imposed “to protect the interest of clients and the wider public”, according to an SRA spokesman.
The SRA spokesman said an investigation into the demise of the firm is “continuing”.
