A well known solicitors firm is set to become the latest business casualty of the recession, as the North West branch of the regional news site, The Business Desk reports.
The legal giant Halliwells reportedly owes £20 million to the Royal Bank of Scotland and has filed a Notice of Intention to Appoint an Administrator at the Company’s Court.
With luxurious offices in Sheffield, Manchester, Liverpool and London, the firm has been dragged down by the economic difficulties of late and has seen profits and turnover drop.
Profits for the year to April 30 2009 fell from £23.4 million to just over £17 million, with income down 5% to £77.8 million. Most noticeably, net debt had increased by £780,000 to reach £25.4 million.
Halliwells now has five days grace before it will be made to appoint an administrator, with sources indicating that it may be sold via a pre-packaged administration.
The solicitors’ assets may be snapped up by rival legal firm, Hill Dickinson. It is also thought that they will move into Halliwells lavish office in Spinningfields, Manchester, once the transaction is completed.
Pre-packaged administrations are often associated with ‘phoenixing’ and have been criticised as being a way to offload debt, as the new firm takes on the good assets of the failed firm, leaving the unsecured debt free to be written off.
In April of this year the Department for Business Innovation and Skills (BIS) announced new plans to build confidence in the ‘pre-pack’ administration process, however, whether these plans will be upheld under the new coalition government remains to be seen.
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