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 – which had an operation based at No.1 Colmore Square in Birmingham – 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 Birmingham, Manchester and Leeds 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.
In Birmingham, the newly enlarged DWF has moved into new offices at One Snowhill.
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.
