Halliwells left debts of more than £200m – administrators
THE debts left behind by collapsed law firm Halliwells, including outstanding lease commitments, have been estimated at more than £200m, according to a new report by the firm’s joint administrators.
A six-month progress report sent by joint administrators Dermot Power and Shay Bannon of accountancy firm BDO shows that on top of the £17.7m it owed to secured creditor Royal Bank of Scotland, the firm has left behind unsecured debts of more than £191m.
Hill Dickinson took on the firm’s Sheffield and Liverpool offices, Barlow Lyde & Gilbert took on the firm’s Manchester-based insurance practice, Kennedys took on members of of Halliwells’ Sheffield insurance team and HBJ Gateley Wareing acquired the rump of the firm’s Manchester operations – including its corporate, real estate and insolvency teams.
Some £176.5m of the debt is owed to former landlords, with the bulk of that being the remaining 17-year lease on Halliwells’s 3 Hardman Square headquarters in Manchester’s Spinningfields district.
Speaking to TheBusinessDesk.com, joint administrator Dermot Power said: “The commercial reality is that something will happen to that building within the next 17 years and once it does that liability will reduce.”
The document shows that the firm also owes almost £5.5m to Her Majesty’s Revenue & Customs, £3.9m to trade creditors and £5.7m to creditors who sub-let part of its buildings.
The deal put together to salvage Halliwells involved a four-way split of the partnership.
The report shows that more than £4.3m in receipts has been received from the various firms to date, although much of this has gone to repay loans owed by former partners to the Halliwells partnership.
Mr Power said that the deal conducted to break-up the business “was a big result for the people and the clients of Halliwells”.
He added: “The alternative would have been horrendous disruption, but as the report shows there is quite a big deficiency.”
The firm employed 671 staff when it was placed into administration last July, and 522 of these eventually transferred to at least one of the four firms which purchased its assets. Most of the remaining 149 staff were made redundant, although some left of their own volition after finding work elsewhere.
The report also shows that the administrators’ fees in dealing with the administration to date have reached more than £805,000 – on top of the £524,000 of fees accrued prior to their appointment.
Pre- and post-appointment legal fees relating to the case have also topped more than £1m.
