CoL left with £450,000 Halliwells bad debt
The College of Law (CoL) is owed almost half a million pounds by Halliwells relating to unpaid LPC fees for the 2009-10 financial year.
Nigel Savage
The institution, which ran the LPC for Halliwells’ trainees on an exclusive basis, is one of dozens of creditors owed a total of £14.1m by the law firm, which went into administration in July this year.
CoL chief executive Nigel Savage said that the organisation might be left with no choice but to write off the bad debt, which amounts to £448,293.30.
“They owe us [but] because we’re unsecured creditors, we’re further down the list,” he explained.
“The primary thing was to make sure that the students could take the exams and make sure they were placed with firms.”
Savage said that he “had no inkling” of the financial difficulties Halliwells was going through, “except that our debts hadn’t been paid”.
“We gave them time to pay like you would in any other situation,” he added.
The first report to creditors from Halliwells administrators Dermot Power and Shay Bannon of BDO, a copy of which was leaked to The Lawyer, revealed the names of businesses, barristers and expert witnesses owed money by Halliwells.
These range from the HMRC, which is owed £4.3m, to dozens of small businesses such as Pavarottis Sandwich Bar on Threadneedle Street, from which the firm ordered thousands of pounds worth of food up until the day it collapsed (20 September 2010).
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Readers' comments (32)
Spucchenzio Dogga | 20-Sep-2010 3:44 pm
If the fees are unpaid, does that mean the students can't qualify? Tee hee!
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Little Nell | 20-Sep-2010 3:45 pm
You'd have a heart of stone not to laugh at this.
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Anonymous | 20-Sep-2010 4:04 pm
The fees are too high anyway
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Anonymous | 20-Sep-2010 4:14 pm
If the College of Law can write off nearly half a million then clearly it is making too much money.
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Lenin | 20-Sep-2010 5:45 pm
Re Little Nell, why, is this funny?! Yeah, cos there's such a laugh in capitalists screwing over the working class. You stupid kulak.
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Anonymous | 20-Sep-2010 6:41 pm
I went to the Manchester COL last year with all the other Halliwells students and had a great time; good people there and they did a lot for us over last summer, many of us have found jobs because of the work they put in for us when evidently they didn't really have to but I'm very grateful that they did. That we seem to have got all that for free - feels odd. But it is probably best not to complain.
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Anonymous | 20-Sep-2010 6:56 pm
"CoL chief executive Nigel Savage said that the organisation might be left with no choice but to write off the bad debt, which amounts to £448,293.30". What a great example the CoL are setting for future members of the profession....." Students, don't bother litigating on behalf of your wronged clients, just roll over and let them *uck you all".
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Anon | 20-Sep-2010 7:58 pm
Even more outrageous than Halliwells' bad debt to the CoL is that this so-called "charity" pays Mr Savage £440K a year, his deputy £410K and an average of £275K a year to every member of its management board. Trebles all round, chaps!!
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Anonymous | 20-Sep-2010 10:25 pm
The writing off of the debt is not a decision that the College has any choice over. The decision to allow the students to take the exams and the decision to offer them support in obtaining training contracts elsewhere is a decision that The College has made and this should be recognised. Whilst I appreciate that it is fashionable to criticise The College, BPP and other providers of the LPC, you speak volumes about yourselves in not giving credit where and when it is due.
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City Gent | 21-Sep-2010 0:54 am
So the management of CoL let a debt of nearly £450,000 build up without taking any action, and as a result of their dopiness it's now to be written off.
"Savage said that he “had no inkling” of the financial difficulties Halliwells was going through, “except that our debts hadn’t been paid”."
Well Mr Savage, when a company doesn't pay its debts that is often an indicator that it's in financial difficulties.
By a remarkable coincidence the loss is only slightly more than the astonishing £440,000 that Nigel Savage is getting paid for running this outfit, which is, believe it or not, a registered charity!
Charity certainly begins at home for some - why bother with the stress of partnership with jobs like this up for grabs.
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Anonymous | 21-Sep-2010 10:13 am
Presumably any barristers / experts that are owed money will be paid eventually if the cases Halliwells were working on are ongoing in the phoenix (if that is the right word) firm.
Did Halliwells have enough prospective trainees to rack up £500,000 in one year on LPC fees?
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Accepting of responsibility | 21-Sep-2010 10:42 am
I would presume that Mr Savage is doing the decent thing and drafting his resignation letter now.
After all a loss of €450k would be sufficient grounds - let alone the comment that he didn't realise that Halliwell's were in financial difficulty ...
... and we trust these guys to be custodians of our future.
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Chris | 21-Sep-2010 11:56 am
Ref Anonymous 20 Sept at 10:25pm. Get a load of the College of Law PR drivel here! Whose criticising BPP and other providers of the LPC?! We're only criticising, and rightly so, the CoL who are involved in this scandal. As a former student of the College, it was obvious to all that the College is a nice little earner, quite how nice a little earner has just become apparent! I wonder, Mrs Business Development, would the College have been so understanding of an individual student who was unable to pay their fees, or is it just one big business doing another a favour? Which puts me in mind of a recent statistic in the Private Eye :
£2bn under-charged PAYE tax that HMRC "cannot afford" to write off, according to Treasury. £6bn tax avoided by Vodafone that HMRC did right off. Are we all noticing a trend here?!
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insolvency lawyer | 21-Sep-2010 12:24 pm
To anonymous at 6.56 on September 20th, on what basis should COL be litigating against Halliwells in adminstration? If the debt is clearly owed (and there doesn't seem any indication that it isn't), there would be no point in attempting to litigate and in any event the administration moratorium would prevent such attempt without the consent of the administrators or the court. All that COL can and should do is hope for a small recovery on any dividend declared by the administrators / subsequent liquidators as an unsecured creditor
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Anonymous | 21-Sep-2010 4:19 pm
The Head of the CoL gets 440,000? As a City partner used to outrageous remuneration, I am still staggered. And his deputy gets 410,000? How much does the Vice Chancellor of Oxford get?
And this guy let an unsecured debt of 450,000 build up? Obviously highly skilled. His comments suggest all the commercial nous of a raw Halliwells trainee after a night on the razzle.
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Anonymous | 21-Sep-2010 4:31 pm
Should this not be referred to the SRA as a disciplinary matter? Are Solicitors allowed to incur debts in the knowledge that they might not be paid? Does this conduct not bring the profession into disrepute?
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Anonymous | 21-Sep-2010 4:31 pm
I wonder which leading legal publication it was who wrote a drooling 2008 profile of this king of managers:
"But then, the energetic 56-year-old does have reason to smile: he has presided over an impressive turnaround at Store Street, which has seen the College of Law evolve into a hungry organisation gearing up to meet the exacting standards of the legal profession in the 21st century."
The article went on to lament his loss of 'designer stubble' quoting him as saying " being told as an 11 year old 'you're no ****ing use to anyone was a defining moment for me"
It ended with the rousing conclusion "with Savage's determination, anything is possible". How very true. Especially massive write offs.
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N | 21-Sep-2010 4:37 pm
Great to see so few solicitors (or perhaps more accurately trainee solicitors) know so little about this country's insolvency law and the Administration process. The continued demise of solicitors with a general legal knowledge I suppose.
It also suprises me to see the ill concieved postings from those supposedly trained to consider the position before delivering opinions. Again a sad demise of a once lofty profession.
So what if the CoL boss gets paid so much, who cares how this compares to the VC of Oxford. I attended the CoL paid for it myself and considered it a worthwhile expense and enjoyable experience (apart from one or two magic circle know it alls).
Finally, credit where it is due well done CoL for helping the students left high and dry by Halliwells out in their hour of need. A tonic to the system in these turbulent times.
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Anonymous | 21-Sep-2010 5:22 pm
Credit to the CoL for looking after the students but wow! When did it become necessary to pay salaries at that level in an educational institution? No wonder there is a reluctance to criticise greed even when it manifests itself in a collapsing firm.
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Anonymous | 22-Sep-2010 3:39 am
Chris @ 11.56am – Since you so explicitly state you are criticising CoL only and not other providers, the CoL is not a "nice little earner" and is not a "big business". As people have repeatedly mentioned it is a registered charity and is therefore not for profit. The top guys are obviously paid well to say the least but it is not a "business" and has to be run in line with charity commission regulations – after salaries and outgoings etc the rest has to be reinvested into the institution itself.
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