Cost of Cobbetts administration hits £1.7m
THE cost of the Cobbetts administration has topped £1.7m, although just under a third relates to rent at three of the former law firm’s offices.
Cobbetts went into administration in January after a severe downturn in trading in late 2012. DWF, with whom it had previously held merger talks, picked up its work in progress and some 400 staff in a £3.9m pre-pack deal.
A progress report filed at Companies House by administrator KPMG shows how professional costs associated with the administration have risen to nearly £1m.
KPMG’s own bill stands at £610,000 for the period to August 5, while legal fees are £352,000. This will be paid from Cobbetts’ assets and so far KPMG has drawn £300,000 to meet its costs.
Some £591,000 is associated with rent and service charges at the firm’s offices in Manchester, Leeds and Birmingham. But this will be covered by a payment of £971,000, referred to as a licence fee, made by DWF for the right to continue using the offices. The Manchester head office has been empty since the firm collapsed.
Cobbetts failed with debts of £91.6m but a large proportion of this figure, £75.6m, was associated with rent and lease liabilities.
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 its properties, HM Revenue & Customs, and other funders, are unlikely to see substantial returns.
