£3.8m recovered in Lexi negligence claims
ADMINISTRATORS handling the collapse of failed Manchester property lender Lexi Holdings have recovered £3.85m after pursuing negligence claims against the firm’s former advisers.
Lexi, led by managing director Shaid Luqman, collapsed in October 2006 with debts of more than £100m. Administrators at KPMG have now recovered £41.8m, but the cost of achieving this has topped £25.1m, a figure which includes legal fees of more than £10m and KPMG’s own bill of £7.1m.
A creditors’ report states that four separate negligence claims have been made. But a spokesman for KPMG would not say which advisers have been targeted or who has paid out.
In 2008 KPMG filed a £50m High Court claim against law firm Pannone which worked for Lexi from July 2001 to April 2004, alleging breach of contract and professional negligence. The case has still not been resolved and could go to trial next year.
Responding to KPMG’s report a Pannone spokesperson said: “The action in which Lexi Holdings sued Pannone remains ongoing and we can confirm that the firm has not paid any money to Lexi.”
Lexi collapsed weeks after Shaid Luqman – once an award-winning entrepreneur and a frequent member of national newspaper Rich Lists – was banned from acting as a company director for a maximum of 15 years for his conduct in running another business, Modern Living UK.
Last year Luqman
, pictured, was released from prison after serving a second sentence related to the demise of the company. He was jailed for 12 months in March 2009 for failing to comply with various court orders relating to Lexi’s collapse.
Mr Luqman, his father and three siblings are facing court judgements for debts worth a total of £260m. Judgements have also been obtained against 15 related parties and associates as the administrators seek to claw back assets. Administrators are also chasing assets in Pakistan.
KPMG’s report states: “The joint administrators continue to investigate a number of potential professional negligence claims against the company’s former advisors. To date, four separate particulars of claim in professional negligence matters have been served.”
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