Donns ‘could have been saved’, argues founder

THE founder of collapsed Manchester law firm Donns argued that the practice could have been saved had the firm received more support from either existing or potential funders.

Raymond Donn, who set up the firm in 1969 and remained as senior partner until administrators were appointed on Friday, argued that the business remained profitable and had paid down a substantial amount of debt in recent years but its efforts to raise new capital proved to be fruitless.

“The practice, in my opinion, should and would have been saved if certain funders had been willing to do so,” he said.

Toby Underwood and Robert Hebenton from PwC were appointed as joint administrators last Friday, which Mr Donn described as “the saddest day of my life”.

Since the administrators’ appointment, some 42 members of staff who worked at the practice’s City Wharf base have been made redundant.

Mr Donn, who is also an honorary president of Manchester City Football Club, added: “I’m in the same position as my staff. I’m out of work… I’m looking for a job, basically.”

Donns firm was handling around 2,500 personal injury and financial mismanagement claims on behalf of clients. These have subsequently been sold on – Irwin Mitchell has bought the personal injury casebook while C Turner Solicitors has taken on financial mis-selling and payment protection insurance claims.

Mr Donn believes the quick sale achieved in both cases demonstrates that the business would have had a future if further investment had been forthcoming.

“At the time we called in administrators it was still profitable but it needed capital and that wasn’t forthcoming. I’m not just talking about the bank – we spoke to other people and organisations as well.”

The firm is understood to have incurred debts through its investment in Destiny Legal Services – a business set up in 2006 to build a brand in the volume sector ahead of the introduction of the new Legal Services Act. At its peak the firm employed around 200 people, but delays in the act’s implementation and a worsening business climate led to it being voluntarily liquidated in October 2010.

A statement from administrators PwC said that it was appointed to Donns as a result of “recent cash flow difficulties and significant historic liabilities”.

Joint administrator Robert Hebenton said: “We appreciate that this will be a worrying time for Donns clients. Arrangements were made to transfer all live client files on appointment to minimise any issues for clients.”