Ex-Cobbetts partners threaten legal action
TWO former partners at failed law firm Cobbetts are considering legal action over money they are owed.
According to a report in The Times today, Charles Bond and Andrew Wright, who both left in February 2012 to join London firm Gowlings, have written to the firm’s partners asking them to honour their “moral and legal obligations”.
The two men, who are owed around £500,000 in equity contributions and a share of profits, warn that they are considering legal action. “Any decision to follow this route will not be taken lightly,” they write.
The Manchester-headquartered firm filed for administration in January and was bought by rival DWF for £3.9m in a pre-pack deal. It left total liabilities of £90.1m, of which £74.4m related to property leases.
Mr Wright and Mr Bond are owed around three quarters of the £630,000 owed to former partners and are ranked as unsecured creditors. They also thought Cobbetts was putting aside money to pay their taxes but this was not the case.
Partners who stayed with the firm can claim tax relief against its losses for the latest full year and DWF has promised to top up any shortfall in members’ capital.
Mr Wright was not available for comment but at a creditors’ meeting earlier in the month he told members of the former management team that he had not been kept fully informed about the state of Cobbetts’ finances.
He said: “I had heard rumours and I was concerned so I wrote to Cobbetts and I was told that things were certainly difficult, but I didn’t know the Solicitors Regulation Authority (SRA) was in there and that KPMG was drawing up contingency plans.
“We would like to be treated in the same way as existing partners… Why didn’t you tell me in December what was going on? Why weren’t you forthright and absolutely honest?”
Charles Bond asked about money taken out of the business in member payouts. “I would like to understand why a drawings freeze was not put in place in the last month. And why drawings took place right up to the administration.”
